Middle-Income Trap and the Baltic States: Common Challenges, Different Strategies*

The paper contributes to further advancing research on the middle-income trap in Baltic States. It argues, first, that while States have already surpassed income levels associated with and continue converging advanced economies, they still might face risks of defined as a difficulty move into higher value-added positions value chain. Second, demonstrates over course recent transformations, growth models become increasingly divergent differences between Estonia Lithuania being most pronounced. Third, it is argued, model also imply different trap. faces risk its leapfrogging specialisation ICT-based services remains premature incapable deliver productivity comparable those economies. Yet, upgrade large manufacturing sector. Instead, continuously sustaining labour-intensive export-led taking advantage cost-competitiveness by diversifying new industries performing lower activities them.