Poverty and Intergenerational Constant Level of Capital

Abstract

Despite a range of orthodox programs, papers and articles, in a couple of decades, that contributes towards ameliorating poverty, the official number of poor people’s decreasing, but at a very slow rate. This is a conceptual paper and targets those poor’s who are self-employed but somehow, they are not able to save. Moreover, this paper exposes two of the hidden fractures in an economy which are always wanders around poverty, and does not allow saving rates to grow, known as Inter-generational constant level of capital and Marginal propensity to consume after marriage. By modelling the process of poverty reduction, it is quite clear that if we break the barrier of constant capital then endogenously the whole process spurts savings rate that can be beneficial in escaping from the trap of poverty.