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DOES ECONOMIC GROWTH REDUCE POVERTY?

DOES ECONOMIC GROWTH REDUCE POVERTY?,Michael Roemer,Mary Kay Gugerty

DOES ECONOMIC GROWTH REDUCE POVERTY?   (Citations: 26)
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ABSTRACT The study examines the question of whether economic growth tends to reduce poverty, where poverty is measured by the incomes of the poorest 20% and 40% of a population. Using the most recent data available, the paper shows that an increase in the rate of GDP growth translates into a direct one-for-one increase in the rate of growth of average incomes of the poorest 40%. GDP growth of ten percent per year is associated with income,growth of ten percent for the poorest 40% of the population. For the poorest 20% the elasticity of response,is 0.921; GDP growth of 10% is associated with income,growth of 9.21%.These results give strong support to the proposition that growth in per capita GDP can be and usually is a powerful force in reducing poverty. In addition, the paper indicates that sound macroeconomic policies and openness to the world
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