Abstract and Keywords
This article explores the interrelationships among poverty, economic performance, and inequality in rich countries. It argues that poverty rises and falls with the business cycle and economic performance. Business cycle refers to macroeconomic fluctuations in economic growth, unemployment, and employment. Higher economic growth and lower unemployment rates mean more individuals employed. Because a job is one of the most effective ways to remove a household from poverty, macroeconomic performance should directly influence individual poverty. This article first describes the statistical models used to estimate the effects of economic performance on poverty before reviewing studies that assess the effects of economic performance on poverty and income inequality. In terms of economic performance, it analyzes the effects of the business cycle, economic growth, unemployment rates, and GDP per capita.
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