The Middle Income Trap refers to countries stagnating and not growing to advanced country levels.  This is illustrated in the figure which plots the per capita incomes of three middle income countries between 1975 and 2005.  In a steadily growing economy, the per capita GDP would rise continuously over time, towards higher income.  This is the experience of the Republic of Korea.  But many MICs do not follow this pattern.  Instead, they have short periods of growth followed by stagnation of even decline, or are stuck at low growth rates.  They are caught in the Middle Income Trap -- unable to compete with low income economies in manufacturing or with advanced economies in high skill innovations.  Put another way, such countries cannot make a timely transition from resource-driven growth with low cost labor and capital to productivity driven growth.