Relationship Between Poverty And Inequality Pdf

relationship between poverty and inequality pdf

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Globalization 1 has become the way to describe changes in international economy and in world politics.

In developmental economics , the Poverty-Growth-Inequality Triangle also called the Growth-Inequality-Poverty Triangle or GIP Triangle refers to the idea that a country's change in poverty can be fully determined by its change in income growth and income inequality. According to the model, a development strategy must then also be based on income growth and income inequality. Economists working for international organizations like the World Bank use the Poverty-Growth-Inequality Triangle to create poverty reduction strategies that include both steps to reduce inequality and stimulate growth.

How is inequality linked to poverty? How important is it relative to economic growth? Inequality re-entered the mainstream development policy agenda following the World Development Report of

Poverty, Inequality and Development

Traditionally, there have been two strands in the analysis of poverty, inequality and development — a micro strand that focuses on individual behavior, welfare economics and the measurement of inequality and poverty; and a macro strand that analyzes economy-wide policies and the role of institutions. This unique volume brings together both strands in a series of essays written by leading experts in the field of economic development. Topics include measurement issues, micro-behavior determinants of poverty outcomes, economy-wide models in the SAM-CGE tradition and the institutional framework underlying macro policies. Alain de Janvry teaches agricultural and resource economics at the University of California, Berkeley. Skip to main content Skip to table of contents.

The Relationship between Income Inequality, Poverty and Globalization

Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. This paper reviews the theoretical literature and empirical evidence on the relationship between poverty, inequality and economic growth. It finds evidence that economic inequality is good for growth as well as new convincing evidence that inequality is bad for growth. Variation in data quality, methodologies, the range of countries included in different studies makes it difficult to compare the evidence.

Metrics details. The study examines the relationship between growth—inequality—poverty GIP triangle and crime rate under the premises of inverted U-shaped Kuznets curve and pro-poor growth scenario in a panel of 16 diversified countries, over a period of — Income inequality and unemployment rate increases crime rate while trade openness supports to decrease crime rate. Crime rate substantially increases income inequality while health expenditures decrease poverty headcount ratio.

Poverty is defined by the World Bank Haughton and Khandker, , p. It can be defined narrowly or more broadly, depending on how well-being is understood. Narrow definitions of well-being are typically linked to commodities, i. Income and consumption are generally defined at household level and do not take account of intra-household variations which obscures individual poverty, see Sen in Chant, ; Coudouel-et-al Poverty is often defined this way in developing countries, as it focuses attention on vital human needs, and helps with measurement and cross country comparisons Hulme,

This chapter aims to establish the relationship between inequality and poverty to explain why poverty persists.

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Understanding the Links between Inequalities and Poverty (LIP). Lin Yang. The relationship between poverty and inequality: Concepts and measurement.


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This article provides an overview of the main approaches taken and the evidence produced by this research.

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