Logo
Munich Personal RePEc Archive

Social inclusion and the emergence of development traps

Lombardo, Vincenzo (2012): Social inclusion and the emergence of development traps.

[thumbnail of MPRA_paper_36766.pdf]
Preview
PDF
MPRA_paper_36766.pdf

Download (907kB) | Preview

Abstract

This paper argues that individuals concerns for relative position contribute to the emergence of development traps. It demonstrates that changes in the mean and the distribution of income qualitatively modify individual’s reference group by affecting the magnitude of the reference standard. Over time, this effect influences the dynamical transition of within dynasties incomes and drives the emergence of development traps. In particular, an increase in mean income and a reduction of inequality cause an increase in the reference standard, inducing, in the long-run, the transition from a Solovian-type stage to a development traps regime as agents need to sacrifice relatively more resources in order to keep up with the reference group.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.