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Escaping the poverty trap in a developing rural economy.
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- Author(s): Nguyen Manh Hung; Makdissi, Paul
- Source:
Canadian Journal of Economics; Feb2004, Vol. 37 Issue 1, p123-139, 17p- Subject Terms:
- Source:
- Additional Information
- Abstract: In this paper, we examine the economic policies that might allow a developing rural economy to escape from the poverty trap characterized by a subsistence level of per capita consumption in the long run. In our model where labour is combined to land available in fixed quantity to produce a homogeneous good, saving could be made through only having children, the number of which is an endogenous decision. We provide conditions under which the economy runs into a poverty trap, and proceed to analyse the relevant policies in this case. We demonstrate that an escape from this poverty trap is possible through a suitable technology transfer, or an appropriate child-rearing tax, but not with a foreign manufacturing sector, which increases only temporarily the labour income in this rural economy. JEL classification: J11, O11, O40 [ABSTRACT FROM AUTHOR]
- Abstract: Dans cet article, nous analysons les politiques qui peuvent permettre à une économie rurale en développement de sortir d’un piège de pauvreté caractérisé par un niveau de consommation de subsistance. Dans notre modèle pour lequel le travail est combinéà la terre afin de produire un bien homogène, l’épargne ne peut se faire qu’à travers les enfants dont le nombre est une variable de décision endogène. Nous décrivons les conditions sous lesquelles l’économie converge vers un piège de pauvreté et analysons les politiques appropriées à adopter dans une telle situation. Nous démontrons que la sortie du piège de pauvreté peut être accomplie grâce à un transfert technologique approprié ou à travers une taxe sur les enfants. Par contre, l’introduction d’un secteur manufacturier contrôlé par des étrangers ne fait qu’accroître temporairement le revenu per capita. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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