The Eternal Triangle of Growth, Inequality and Poverty Reduction
The Eternal Triangle of Growth, Inequality and Poverty Reduction
The Eternal Triangle of Growth, Inequality and Poverty Reduction
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Figure 2: Decomposition <strong>of</strong> change in distribution <strong>and</strong> poverty<br />
into growth <strong>and</strong> distribution effects<br />
Source: Bourguignon (2003), Figure 1.2; Bourguignon (2004), Figure 1<br />
Change in <strong>Poverty</strong> = F( growth, distribution, change in distribution) (assuming log-normal distribution)<br />
3<br />
Figure 1: <strong>Poverty</strong>-<strong>Growth</strong>-<strong>Inequality</strong> <strong>Triangle</strong><br />
<strong>Growth</strong><br />
Increases in<br />
Mean Income Level<br />
Trade-<strong>of</strong>f ?<br />
Development Governance<br />
Institutions<br />
(common factors?)<br />
<strong>Inequality</strong><br />
Distribution <strong>of</strong> Income<br />
Distribution <strong>of</strong> Assets<br />
Elasticity <strong>of</strong> <strong>Poverty</strong> <strong>Reduction</strong> 'Pro-Poor' Elasticity <strong>of</strong> <strong>Poverty</strong> <strong>Reduction</strong><br />
w.r.t. <strong>Growth</strong><br />
w.r.t. Distribution<br />
<strong>Poverty</strong><br />
<strong>Reduction</strong> in<br />
Absolute <strong>Poverty</strong><br />
Source: Author<br />
Pro-Poor vs. Pro-<strong>Growth</strong><br />
Pro-Poor <strong>Growth</strong><br />
4<br />
2
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