The vicious circle of poverty, as described by Nurkse, suggests that low income in underdeveloped countries leads to low savings, which in turn leads to low investment. Low investment results in low capital formation and low productivity, which perpetuates low income, thus completing the circle and trapping the country in poverty. The phrase succinctly captures this self-reinforcing nature of poverty.
'A country is poor, because it is poor' this statement is of
Asked in MPSC CS Prelims 2023 · Topic: Nature of Indian Economy (Developing Economy Characteristics)
More Economic Development questions
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