TOURISM DEVELOPMENT AS A FACTOR OF THE COUNTRY'S ESCAPE FROM “THE MIDDLE-INCOME TRAP”

Abstract

The concept of “middle-income trap” and the main reasons for the country’s entry into it is described in the article. The purpose of this article is the analysis of tourism development as an important factor in the state’s recovery from “the middle-income trap”. The economic development of Thailand, Turkey and Mexico, which are stuck in the trap and where the tourism sector occupies significant positions in GDP growth, is analyzed. Using the least-squares method with instrumental variables (2SLS), іt has been empirically confirmed that tourism development in Turkey can drive the economy out of the trap, while in Thailand and Mexico, the manufacturing sector plays a significant role in economic growth, despite significant tourism revenues. The recommendations on possible ways out of “the middle income trap” are provided by authors.