Development Economics Paper 3 Essay Example | Topics and Well Written Essays - 500 words - 1

Development Economics Paper 3 - Essay Example From a critical point of view I believe in the existence of the poverty trap that has essentially entangled a group of people and deprive them from getting what they would desire to get. In essence, an individual born to a poor family in the village set up of a third world country may be entangled within the vicious circle of poverty, lack of access to education and healthcare facilities as well as exposure to the world out there. In such a case, the child may be limited and despite of his talent and great mind, they fail to get a platform to practice it and perfect the art. This leaves them in the same place becoming a vicious circle for a family or the state at large. there is poverty trap for those who have too little and cannot invest to get enough returns whereas those who have access to reasonably more resources, there potential to grow is evident regardless of the situation around them. As one continues to invest in what they have, growth is eminent and sooner or later there w ill be no poverty trap entangling them as they break free from it. Yes, I believe that the poverty trap works when all other factors are kept constant. Someone’s financial income essentially determines there financial might and dictates what they can do in as far as investment is concerned. The economic status of an individual starts flat then rises as one gets income but the goes down as responsibilities increases creating an S-curve that depicts element of a poverty trap. In this sense, poverty trap is evident and works by way of limiting ones potential within their financial might derailing them from the ability to invest a break away from the vicious cycle of poverty (Banerjee and Duflo 55). S-curve is a theoretical shape depicting a poverty trap that shows one beginning on a straight line, then goes up to a point where they stagnant and start the downward movement again. This concept is used