Date of Original Version
Abstract or Table of Contents
Poverty is defined as the deprivation of necessary resources such as food, shelter, clothing, and water. It also includes the lack of opportunities for education and employment. In addition, the World Bank defines extreme poverty as living on less than $1 a day, and currently, about half of the world’s population lives on less than $2 a day. Many of these people suffering from poverty live in developing nations such as Sub- Saharan Africa, East and South Asia, and Latin America. Due to the high number of people in these developing nations that live in poverty, research in development economics has grown. Development economics is a field of economics that analyzes aspects of the development process such as poverty in low-income countries. Using models of development economics, one can understand why poverty exists, what causes it, and how to eliminate it. It seeks to explain and understand why disparities exist among countries and how economics can help find a solution. Development economics exists because of a key tenet of economics which says that resources are scarce; and economics attempts to explain the efficient allocation of those resources. Development economics focuses on fostering stable and sustainable economic growth, and structural change at both the domestic and international levels.