36
But when people pathologically hoard so much cash that they impoverish
the entire nation
This sentence seems to imply that we should fault the rich not because they are rich, but because they do not spend their riches.
Ok, let's scrutinize this assertion, and not go into philosophical and sociopolitical arguments about inequality, justice, etc, which ...
13
Her position isn't quite untrue. If you define poor and rich relatively, you cannot have "poor" without having "rich." However, this has little to do with hoarding.
We often think of money in terms of the medium it is stored. We typically understand a vault full of cash. However, such a vault isn't doing anything. Money does things when it is in motion....
11
To extend @Majoko's comment, you may be very interested in the book Poor Economics which discusses many of the issues you note. It specifically discusses issues with theory, and of course has a lot of empirical work to back it up.
Perhaps on the other end of the spectrum is general equilibrium theory applied to poverty and the developing world. you should ...
10
The argument is largely based of the following premise:
You have 10 Million Dollars. Say in one case you gave it all to 1 already rich millionaire, and in the other case you gave $1000 to 10,000 poor people, where we define a poor person as someone who does have somewhere to live (not homeless) but lives paycheck to paycheck and to whom even something like ...
9
This particular statement posted is actually two separate statements that are being conflated despite not being related:
Statement 1:
People who collect many newspapers or cats are called "nuts" by "us"
Statement 2:
People who have a lot of money impoverish the nation, but "we" treat them as role models and put them on the cover of Fortune
The ...
7
One argument brought forward (it is a generalization/argument for lack of infrastructures) is the Acemoglu-Robinson hypothesis of extractive versus inclusive institutions.
Long-story short: some institutions are good for (long term) growth ("inclusive"), and some are good for short-term extraction of resources ("extractive"). Depending on whether the elites ...
6
The Economist (Oct 8th, 2016, online, PDF) attempts to answer this question.
It defines the global poverty gap as the amount we'd have to transfer to the world's extreme poor (defined as those living below $\$1.90$ a day, at 2011 PPP), in order to lift them to the $\$1.90$ a day threshold.
The evolution of this global poverty gap from 1990-2013 is graphed ...
5
When people hoard cash they actually increase the value of everyone else's cash.
Why? Because if they didn't hold it then some of it would instead be sold to the investors who support the price of the currency using different currencies.
When it was dumped in this manner, everyone else's currency would be decreased in value on a per unit basis, yet most ...
4
Below I'll give you a partial answer by talking about research on poverty traps. Before that, though, let me point out that it is a bit difficult to find any theory that is not motivated by observations. Theories of poverty often have a trap because theorists want to explain why there are locations in the world where everyone is poor, and other places ...
4
If you are looking for a light-weight, definitely somewhat partisan take on development economics (I realize this is only part of what you want) check out The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. It goes into the theory and history of development economics and its application to policy.
If you're looking for a ...
4
First we must address the nature of savings. Savings are not bad or good per se. It depends on the context. It is true that in the short run, increased savings will lower consumption, thereby lowering GDP. However savings also increase investment, which in the long run increases economic growth. Therefore, the optimal savings rate is found by solving the ...
4
This assumes they store their own money in their house. Like a room full of bills. If that's the case, if billions of dollars are stashed. Then it technically would reduce the supply of money and thus increase its value. If that was the case, we could call them crazy (unless it's drug money). But that's not what is happening. They store their money in a bank ...
4
This measure of poverty depends on your definition of basic needs and local prices. Argentina is a good example for how local prices matter. It is widely accepted that official price and inflation statistics published by the Argentinian government are cooked and inflation rates in the last few years are have been substantially bigger than official numbers ...
3
US
A snapshot of Poverty for the US is here. The key is Figure 5, which shows alternative measures of poverty, using different data and methods. (see text for details). Basically, they show that there is plenty of variation from alternative criteria, ranging from 0% to 5%. This is likely to be an explanation of why sometimes evidence seem to be ...
3
This is only for Europe unfortunately, but Bob Allen has a famous paper in which he presents reconstructed data for real wages in different European cities from 1350 all the way to 1799:
Allen, Robert C. "The great divergence in European wages and prices from the Middle Ages to the First World War." Explorations in economic history 38.4 (2001): 411-447.
...
3
I am afraid the solution to world poverty will not be two pages long. Some flaws:
You cannot simply give poor people in other countries money, their government controls their financial system. Even if the government agreed and you transferred millions of dollars it would not make more housing and consumer goods available at their location, they would just ...
3
While a lack of infrastructure and public goods may explain poverty in a short-term perspective, it is widely considered that institutions are the key factor in the long term (how could infrastructure and public goods be provided without suitable institutions?).
As well as Acemoglu & Robinson, referred to in FooBar's answer, two important writers on ...
3
Most of the "official" statistics compiled in international organisations use some thresholds like the one shown in the graph. Common for instance are the one by the World Bank (data here and report here).
Therefore, unless you find such data already computed, it is not possible to tell.
There is one imprecise alternative though. You can use this online ...
3
High poverty rates are generally a result of two factors
A) Low per capita income (GDP / capita)
B) High inequality (frequently measured as the Gini coefficient)
There are multiple potential reasons for any country's income level and degree of inequality (not just for Mexico's). Moreover, one can decompose your question into two.
1) What makes some ...
3
Unlike many Nobel prizewinners, this year's award was not really given for a central theoretical development. All three of the winners have made important theoretical contributions relevant to development economics and that inspired their future work (for example Banerjee on networks or Kremer on technological change and productivity). However, their major ...
2
A partial answer : I m not sure what measurement the World Bank would recommend, but I suspect that in practice, the expenses that are taken into account to measure whether one is below or above the 1.25$ threshold vary from one study to another.
For instance in their famous The Economic Lives of the Poor, Banerjee and Duflo write
"From each of these ...
2
At the level of an individual household it can be rational for poverty and savings to coexist.
There are degrees of poverty. In terms of food, there is having a
somewhat varied and adequate diet but with meat only once a week, there is
having a monotonous, entirely vegetarian but adequate diet, and there is
going hungry. In terms of education (in a ...
2
If it is about European Union, it would make sense to look at austerity as a response to the debt crisis. I would measure austerity not as the level of government debt, but as the change in levels of government debt from year to year. The slower the government debt (as a share of GDP) increases, the more austere are the budget policies of that country.
...
2
I found a tool in the World Bank website which allows you to set any income boundary, any country, years from 1980 to 2015 and display the data in charts to see how many people are under that boundary. You can set it to 15 dollars or any other figure.
2
I am just guessing at this, but I have not heard of any evidence that any culture had a large percentage of parents that wanted their babies to die. Thus the “good parent” ratio is probably not changing a lot across societies, at least when compared to the differentials in infant mortality that exist across countries and time.
“Access to health care” is part ...
2
On Gapminder's website they write
If you have a question, maybe it's already answered in our Q&A.
Q&A
The underlined text links to a Google document, which answers several questions. Under one of these answers
The households’ door numbers represent the consumption values (US dollars) that each adult in the household has per month. This ...
1
One of the most fundamental aspects of economics is scarcity. We have a limited amount of material resources. Not everyone can have everything. However, through specialization, some become very good at making or acquiring a few things such that they have excess. Large-scale trading of excess becomes difficult without a system, thus we have money. Money is a ...
1
I think that your aunt is confusing cause and effect here. Rich people staying rich is seldom the cause of poverty, rather it is a parallel effect. The cause of much poverty and much wealth is the legal/social/economic environment that maintains stratification.
Many poor people stay poor because of the situation that they are in. They live in ...
1
I am unsure about rates in Europe or the United States. In any case one can debate about how poor "the poor" in Europe and the US really are compared to people that have to survive on a dollar a day (see e.g. Tim Haab on the difference between inequality and poverty). That is not to say that these people aren't suffering or hungry, but at least not as hungry ...
1
In addition to what Jeremy and Kitsune said:
Henry George's Progress and Poverty looked at this problem of poverty amidst plenty more than hundred years ago.
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