Nelson's low level equilibrium trap is based on underdeveloped countries and explains how they can get stuck in a low level equilibrium trap where the growth of per capita income is zero and savings and investments are also zero. This happens because the growth of population is higher than the growth rate of income until a certain level of per capita income is achieved by the economy. The economy can get out of this trap through heavy investment or by focusing on technological advancement.
9 окт 2024