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Wariness and Poverty Traps

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  • Hai Ha Pham

    (EM Normandie)

  • Ngoc-Sang Pham

    (EM Normandie)

Abstract

We investigate the effects of wariness (defined as individuals' concern for their minimum utility over time) on poverty traps and equilibrium multiplicity in an overlapping generations (OLG) model. We explore conditions under which (i) wariness amplifies or mitigates the likelihood of poverty traps in the economy and (ii) it gives rise to multiple intertemporal equilibria. Furthermore, we conduct comparative statics to characterize these effects and to examine how the interplay between wariness, productivity, and factor substitutability influences the dynamics of the economy.

Suggested Citation

  • Hai Ha Pham & Ngoc-Sang Pham, 2025. "Wariness and Poverty Traps," Papers 2510.14418, arXiv.org.
    • Handle: RePEc:arx:papers:2510.14418
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    References listed on IDEAS

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