Abstract

ACCINELLI, Elvio; BRIDA, Juan G.  and  LONDON, Silvia. Economic Growth and Poverty Traps: What is the Role of Human Capital?. Inv. Econ [online]. 2007, vol.66, n.261, pp.97-118. ISSN 0185-1667.

This paper introduces a model of economic growth intended for representing developing countries that exhibit poverty traps. The policies of financial restraint that are usually asked for to those countries are shown here to lead to a lower equilibrium. That is, they do not allow those economies to get out of their poverty traps. Sustained investment in the creation of human capital, instead, helps to surpass that barrier and lead the economies towards higher growth equilibrium.