Where does the Poverty Equilibrium come from? How do its restoring forces act?
I can’t claim to know the answer, but let’s spend a few minutes trying to figure it out.
Let’s stick with Eliezer’s definition of poverty as extreme difficulty accessing the necessities of life. That is, if it’s very hard for you to afford, say, housing, you’re in poverty.
It is not difficulties affording luxuries; just necessities. Obviously this is a little tricky because “necessity” is a spectrum, not a binary (is a school for your kids where they’re safe from violence a luxury or a necessity?). But let’s ignore that for now and pretend we can 100% accurately classify goods as... (read more)
I can’t claim to know the answer, but let’s spend a few minutes trying to figure it out.
Let’s stick with Eliezer’s definition of poverty as extreme difficulty accessing the necessities of life. That is, if it’s very hard for you to afford, say, housing, you’re in poverty.
It is not difficulties affording luxuries; just necessities. Obviously this is a little tricky because “necessity” is a spectrum, not a binary (is a school for your kids where they’re safe from violence a luxury or a necessity?). But let’s ignore that for now and pretend we can 100% accurately classify goods as... (read more)