How Does Poverty Affect The Macro Economy

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Introduction
Poverty define as the state or condition in which person is unable to fulfill his/her basic need, such as pure water, qualitative food, shelter, clothing, education, basic health etc.Or a person who earns only $2 per day. It is an extremely unpleasant situation to live in so it is not wondering that people go to significant lengths to avoid it and tries very hard to escape from poverty once they have sunk into it.
Poverty dynamics mean changes in poverty level with respect to time. It gives different directions of poverty with the passage of time.
Topic I have chosen to understand the real picture of common people, who still hard to meet two times of meal. I tried to compare the developed countries; i-e USA from developing countries …show more content…

Balke and Daniel J. Slottje (Feb., 1993) has estimated Poverty and Change in the Macroeconomy of US by using vector auto regression (VAR) for the data (1950-1989). He tried to find out impact of macroeconomic activity on the level of poverty. He assumed that the poverty rate changes due to changes in various indicators of macroeconomics activities in US economy. He took the help of empirical model to find relationship between the macro economy and poverty. He concluded that in US economy role of cyclic changes in macro economy has a significanteffect over the poverty level. He said macroeconomic is effected by the inflation and unemployment and that cause the poverty. Inflation effects heavily over poverty as compare to other macro variables, such a supply shock. Overall, he concise that economics shock in inflation and unemployment are playing significant role in the variability of poverty …show more content…

It is very difficult to separate exaggeration about the children from realities. At the same time,accurately measuring children 's economic well-being and inequality,sand accounting for trends so as to inform public policy, is more important than ever in light of cur- rent welfare reform and the new emphasis on behavioral poverty born of spatial and social isolation (Wilson 1987, Massey & Denton

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