Othermechanisms
The poverty trap literature is vast, and even in a survey of this size many models must be neglected. A few of the more egregious omissions are listed in this section.
One of the earliest streams of literature on poverty traps is that related to endogenous fertility.
A classic contribution is Nelson (1956), who shows how persistent underdevelopment can result from demographics. In his model, any increase in income lowers the death rate, which increases population and lowers capital stock per worker. If the population effect is stronger than diminishing returns then capital per worker cannot rise. See Azariadis (1996, Section 3.4) for other mechanisms and more references.Other kinds of traps that arise in convex economies with complete markets include impatience traps and technology traps. Impatience traps typically involve subsistence levels of consumption, and sensitivity of consumption to income at low levels. See Magill and Nishimura (1984) or Azariadis (1996, Section 3.1). Technology traps are associated with low degrees of substitutability between capital and labor. See Azariadis (1996, Section 3.2).
See Dasgupta and Ray (1986) or Dasgupta (2003) for an introduction to the literature on malnutrition and underdevelopment. See also Basu and Van (1998) for a model of child labor with multiple equilibria.
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