Current Economic Research in Different Countries

Abstract

The study explores the existence of two income traps at two income levels. The first one is the income trap of the upper-middle-income provinces while they are becoming high-income provinces. The other income trap, as expected, is the one that may exist while the lower-middle-income provinces become an upper-middle-income provinces. The empirical investigation shows that all 74 upper-middle-income and five lower-middle-income Turkish provinces are in a divergence trap. The depreciation of the Turkish Lira against the U.S. dollar after 2013 seems the main reason for the increasing gap between the per capita income levels of the Turkish provinces and the high-income segment.