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Economics a level help

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ninja24
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#1
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#1
I understand how economic growth will REDUCE poverty. But, why may it not reduce poverty? Like what are the reasons?
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al131859
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(Original post by ninja24)
I understand how economic growth will REDUCE poverty. But, why may it not reduce poverty? Like what are the reasons?
it will because of trickledown, so think why wont wealth and income trickledown to the poorest? Think about poor governance and corruption so no redistirbution of income. Also think about what those who are wealthy might do, those with high icomes will invest in other economies (hot money flows with interest rates) so almost capital flight. Also think about the fact that economic growth can be due to TNC's investing (FDI) and they take profits back to home country. Also they exploit workers, so small icnoems, small multipler. Dveloping economies have a poor finacial system so not likey to allow for saving, which also explain capital flight. The TNC's can avoid taxes due to blackmail (say they will leave if have to pay tax), so less ability for government to redistriute. Could even talk about political stance. Think about the two types of poverty too (absolute and relative)
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