Poverty, growth and policy options

Examines and tests the hypotheses whether the relationship between poverty and development is U-shaped or rectangular hyperbolic. While testing these hypotheses, other variables such as life expectancy, adult literacy rate, and special country characteristics are taken into consideration. The use of international cross-section data of 34 countries on an essentially dynamic issue was made in the absence of time-series data. The authors find that poverty, measured by the proportion of people below US $35.00 per capita (in constant 1975 prices), starts declining at a decreasing rate and reaches an asymptotic level of 5 to 8% of the population below the poverty line.-Authors