Thursday, March 8, 2012

Economic Theory of Poverty

It is important to note that, Samuelson devoted a chapter to the topic in his "Principles of Economics." So this is an important issue in Economics.

Samuelson starts with a strong statement. We live in a double standard society. On one side we speak of one- person one-vote and equality of opportunity and on the other side, classical economics theorizes that the existing income inequalities and the resulting wealth inequalities can't be eliminated by state intervention. Such interventions lead to decrease in national income.

Income and wealth inequalities in an economy are common. In market economies they can be more prominent.
One idea of poverty is income below subsistence level.
Sources of poverty
1. Differences in wealth
2. Differences in personal ability
3.Differences in education and training
Antipoverty policies by some governments
Food stamps
Welfare assistance
Subsidies on goods of mass consumption



Paul Samuelson and William D. Nordhaus, Economics, 13th Edition,  McGraw-Hill, 1989

The Economics of Poverty - Brief note

Economics of Poverty - Text by Schiller, Pearson, 10e 2utb2lsm2k7a/ 240

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