What stunts economic growth and causes the poverty trap?

Atsue Mizushima

MPRA Paper from University Library of Munich, Germany

Abstract: In spite of an identical initial condition, why are some parts of the world so rich and others so poor? To address this question, this paper constructs a simple theoretical model that incorporates human infrastructure and child labor The first part of the paper shows that the condition of bifurcation from an identical initial condition depends on the technology level. We also show that current dynamic trends highly depend on initial endowments and productivity. The second part of the paper examines the effect of development assistance in recipient countries. By analyzing two types of programs; the elimination of child labor and support to strengthen human infrastructure, we show that the former (latter) program is effective for middle- (low-) income countries.

Keywords: Child labor; human infrastructure; human capital; divergence; poverty trap; development aid (search for similar items in EconPapers)
JEL-codes: I00 J01 O11 O41 (search for similar items in EconPapers)
Date: 2019-02-18
New Economics Papers: this item is included in nep-gro, nep-lab and nep-war
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92238

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