Wariness and Poverty Traps

Hai Ha Pham and Ngoc-Sang Pham
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Hai Ha Pham: EM Normandie
Ngoc-Sang Pham: EM Normandie

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Abstract: We investigate the effects of wariness (defined as individuals' concern for their minimum utility over time) on poverty traps and equilibrium multiplicity in an overlapping generations (OLG) model. We explore conditions under which (i) wariness amplifies or mitigates the likelihood of poverty traps in the economy and (ii) it gives rise to multiple intertemporal equilibria. Furthermore, we conduct comparative statics to characterize these effects and to examine how the interplay between wariness, productivity, and factor substitutability influences the dynamics of the economy.

Date: 2025-10
New Economics Papers: this item is included in nep-dge and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2510.14418

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