5.2. Looking at income-per-person, the richest countries in the world have about 40 times the income-per-person...

 

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5.2. Looking at income-per-person, the richest countries in the world have about 40 times the income-per-person than the poorest countries. A rough decomposition suggests that a factor of about 2 is associated with capital- per-person, a factor of about 2.2 can be associated with educational differences, and a factor of about 9 can be associated with differences in technology. To what extent can the enormous difference in income-per- person between rich countries and poor countries be explained by poverty traps? Explain your reasoning. 5.2. Looking at income-per-person, the richest countries in the world have about 40 times the income-per-person than the poorest countries. A rough decomposition suggests that a factor of about 2 is associated with capital- per-person, a factor of about 2.2 can be associated with educational differences, and a factor of about 9 can be associated with differences in technology. To what extent can the enormous difference in income-per- person between rich countries and poor countries be explained by poverty traps? Explain your reasoning.

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The concept of poverty traps suggests that some countries or regions may be stuck in a cycle of pove... View the full answer