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Economic Growth in subsistence Economy: An alternative view


<p>In conventional growth models, deferring current consumption and saving part of current income plays an important role in explaining the process of economic growth. In the case of subsistence economies, however, taking such economic action is hardly possible, (Myrdal, 1971). This leads, based on the models, one to conclude the impossibility of endogenously driven growth in these economies, which amounts to the notion that the poor tend to remain poor unless their economies are stimulated exogenously. After discussing this problem in detail, this paper attempts to develop a framework that relies, on one of its sides, on effects of factors of market failure and proposes the possibility of growth in subsistence economies as far as they have the capacity to manage and exploit factors of market failures. Empirical evidence obtained from panel data analysis supports this argument.</p>

Corporate Author: 
Alemayehu Seyoum(Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Ethiopian Economic Association (EEA)
Primary Descriptors: 

<p>Subsistence economy, Market failure</p>

Secondary Descriptor: 

<p>Economic growth, Savings, Panel data</p>

Cataloge Date: 
Broad Subject heading: 
Call Number: 
330.963 PRO 2004
Serial Key Title: 
Proceedings of the First International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2013-05-27 00:00:00
Forum or Discussion date: 
2013-02-27 00:00:00
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: