The history of contemporary world economy has revealed the fact that some countries, particularly in Latin America and the Caribbean, felled into the "middle income trap" mainly due to their slow growth rate or a long-term stagnation and thus were unable to accelerate to the high-income economies. This analysis first summarizes the characteristics of the "middle income trap", and then in retrospect, makes a systematic review of the negative developments of the LAC economies since the 1970s. Among all possible theoretical and practical elements that may account for this longstanding dilemma, the authors points out that the decline of total factor productivity proves to be the primary convincing reason, just as argued as the pitfalls in the resource allocation/reorganization, discontinued and unreasonable ratio of investment in R & D that are detrimental to the region's sustainable innovation capability. Based on the above analysis, the authors conclude that developing economies, even at their robust growing phases, should bear four lessons in mind to avoid "middle income trap" mistakes and take right measures to improve total factor productivity, such as to ensure the efficiency of resource allocation, to timely enhance the human capital stock, to initiate and attract massive talents and to shift investment gravity to an enterprise-centered R&D system. <<