456
MACROECONOMICS
temporary higher levels of income per capita but would still return eventu-
ally to
_
k
1
and not escape the poverty trap. A sufficiently large provision of
capital, which makes
k
_
k
2
,
is required to break out of the poverty trap.
44
In a developing economy with poverty traps, it is not hard to imagine why
there may be no tendency towards convergence.
16.9
Endogenous Growth
Increasingly, it has been realized that saving and capital accumulation, popu-
lation growth, and exogenously driven productivity growth are not the sat-
isfactory ways to explain economic growth. At first glance, they provide ...
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