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HandWiki. Low-Level Equilibrium Trap. Encyclopedia. Available online: https://encyclopedia.pub/entry/36948 (accessed on 23 September 2026).
HandWiki. Low-Level Equilibrium Trap. Encyclopedia. Available at: https://encyclopedia.pub/entry/36948. Accessed September 23, 2026.
HandWiki. "Low-Level Equilibrium Trap" Encyclopedia, https://encyclopedia.pub/entry/36948 (accessed September 23, 2026).
HandWiki. (2022, November 29). Low-Level Equilibrium Trap. In Encyclopedia. https://encyclopedia.pub/entry/36948
HandWiki. "Low-Level Equilibrium Trap." Encyclopedia. Web. 29 November, 2022.
Low-Level Equilibrium Trap
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The content is sourced from: https://handwiki.org/wiki/Finance:Low-level_equilibrium_trap

The low-level equilibrium trap is a concept in economics developed by Richard R. Nelson, in which at low levels of per capita income people are too poor to save and invest much, and this low level of investment results in low rate of growth in national income. As per capita income rises above a certain minimum level at which there is zero saving, a rising proportion of income will be saved and invested and this will lead to higher rate of growth in income.

low level low-level economics

References

  1. Nelson, Richard R. Nelson (December 1956). "A Theory of the Low-Level Equilibrium Trap in Underdeveloped Economies". The American Economic Review 46 (5): 894–908. 
  2. Bura, Rohit. "What is the Low Level Equilibrium Trap theory put forward by R.R. Nelson?". PreserveArticles.com. http://www.preservearticles.com/2012042631239/what-is-the-low-level-equilibrium-trap-theory-put-forward-by-rr-nelson.html. 
  3. Nelson, Richard R. (July 1960). "Growth Models and the Escape from the Low-Level Equilibrium Trap: The Case of Japan". Economic Development and Cultural Change 8 (4): 378–388. doi:10.1086/449857.  https://dx.doi.org/10.1086%2F449857
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