Wariness and Poverty Traps

Hai Ha Pham () and Ngoc-Sang Pham ()
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Hai Ha Pham: Vietnam National University of Hochiminh City - HCMUT - Ho Chi Minh City University of Technology [Vietnam National University, HCM] - VNU-HCM - Vietnam National University, Ho Chi Minh City / Đại học Quốc gia TP. Hồ Chí Minh, Department of Mathematics, International University - Vietnam National University
Ngoc-Sang Pham: EM Normandie - École de Management de Normandie = EM Normandie Business School

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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.

Keywords: capital intensity; elasticity of factor substitution; CES production function; poverty trap; multiple equilibria; economic growth; overlapping generations; wariness (search for similar items in EconPapers)
Date: 2025-10-15
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