Supply Side Vicious circle Vicious circle of Poverty Lets look at this scenario

Supply side vicious circle vicious circle of poverty

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Supply Side Vicious circle
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Vicious circle of Poverty Lets look at this scenario with a family in absolute poverty. Poverty is generally measured with reference to a poverty line - the minimum level of income or consumption deemed adequate in a particular country. ... In October 2015, the World Bank updated the international poverty line to US$1.90 a day. The vicious circle caused by Market Imperfection is:
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Growth and Poverty Linkages Cases 0 A B C D Rich --- --- --- --- Average --- X Poor INCOME Poverty Line Case: (A): GDP growth does not affect inequality & reduce poverty headcount GDP growth good for the poor. (B): GDP growth only benefits rich and lead to higher inequality & no poverty reduction. (C): GDP growth comes with lower inequality and so larger poverty reduction pro-poor growth (D): GDP growth benefits rich and makes poor worse off inequality & poverty increase immiserizing growth. Rising tide lift all boats?
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Table 3: Growth Rates and Changes in Poverty Rates, Selected Countries Period Annual Growth Rate in per Capita GDP, % Poverty Rate at Beginning of Period, % Poverty Rate at End of Period, % Bangladesh 1984-2010 2.9 60.6 43.3 Brazil 1981-2009 1.1 13.6 6.1 China 1981-2009 9.1 84.0 11.8 Egypt 1991-2008 2.9 4.5 1.7 Ethiopia 1982-2011 1.8 66.2 30.7 India 1978-2010 3.9 65.9 32.7 Indonesia 1984-2010 3.6 62.8 18.1 Mexico 1984-2010 0.8 12.8 0.7 Nigeria 1986-2010 2.3 53.9 68.0 Philippines 1985-2009 1.6 34.9 18.4 South Africa 1993-2009 1.5 24.3 13.8 Thailand 1981-2010 4.2 22.0 0.4 Source: World Bank, World Development Indicators Database, 2013. Note: The poverty rate is based on a poverty line of $1.25 per day.
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Promoting Economic Growth & Development Prescription for more human and physical capital is broadly correct Appropriate technology and education Fiscal incentives for private sector capital formation to complement public investment in infrastructure. {crowding-in} Most countries need institutions to support growth Corruption creates uncertainty about property rights and drains financial resources out of the country capital flight Clear rules and incentives that promotes entrepreneurship Competitive market and absence of state monopolies; Support innovation, R&D: build national innovation system (NIS) Political stability encourages foreign investment Strategies for Growth & Development Export-Oriented vs Import Substitution Industrialization (e.g.NIES) Plugging into Global Value Chain; Cluster Development. . . Policies for Economic Growth
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Recognizing Limits to Growth There are identifiable and imminent limits to growth founded on: The depletion of resources Pollution of the ecosystem Some thinks the above being too pessimistic and suggest that solutions come in the form of: Technological advancement Market adaptation
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