چکیده:
Poverty traps as vicious circles preserve people‘s poverty and undermine the poor effort to overcome their own misery. This paper presents an empirical test for a subclass of poverty traps hypotheses. This test is based on the production function to generate multiple equilibrium، while must be present in the region between the equilibrium. Therefore، increasing returns should be strongest when the economy is transiting between steady state than when it is at or near in one of those steady states. We implement this idea by estimating the degree of increasing returns during growth accelerations and growth transitions for a panel of developing and developed economies using World Bank Industrial data. Results of this study show that economies of scale occur where there is collapse in growth. Nevertheless، there are no criteria to distinguish transitory ranges from non-transitory ones. Although، this assumption confirmed economies of scale in industry result in poverty traps.
خلاصه ماشینی:
To do this, we slightly modify equation (20) and replace the following ratios with the introduced symbols: (Refer to page image) We separate production in transition between its equilibria {i€T} from other regions: (Refer to page image) The research hypothesis is based on the premise that "the existence of increasing returns in industry is a sign of the existence of poverty traps.
As the focus of this research is directed toward identifying whether production technology is characterized by increasing returns coinciding with growth transitions or not (and not whether poverty traps operate through more complex institutional pathways or not), explicitly demonstrating these inefficiencies is important in this study.
3-2- Results of estimating the total industrial production function In order to examine the existence of poverty traps in countries and returns to scale, first, the transition periods in countries are identified and the position of each country in the discussed time period is determined.
Therefore, in the periods when the function was transitioning, they showed a stronger indicator of economies of scale compared to other regions, and thus, the hypothesis under test based on the existence of a stronger indicator for the presence of increasing returns in the industrial production function during the transition between equilibria is accepted.
Based on the results obtained from the estimation of composite data of the total industrial production function, it is observed that countries in periods where they had a decline in GDP growth showed a stronger indicator of increasing returns in industry compared to periods where they had an acceleration in growth; therefore, the presence of poverty traps in this range is more likely.
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