Ask Question
27 August, 17:23

How does it resolve the seemingly contradictory pieces of evidence regarding consumption behavior found by Kuznets?

+1
Answers (1)
  1. 27 August, 17:26
    0
    Answer: The Kuznets curve implies that as a nation undergoes industrialization - and especially the mechanization of agriculture - the center of the nation's economy will shift to the cities. As internal migration by farmers looking for better-paying jobs in urban hubs causes a significant rural-urban inequality gap (the owners of firms would be profiting, while laborers from those industries would see their incomes rise at a much slower rate and agricultural workers would possibly see their incomes decrease), rural populations decrease as urban populations increase. Inequality is then expected to decrease when a certain level of average income is reached and the processes of industrialization - democratization and the rise of the welfare state - allow for the benefits from rapid growth, and increase the per-capita income. Kuznets believed that inequality would follow an inverted "U" shape as it rises and then falls again with the increase of income per-capita.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “How does it resolve the seemingly contradictory pieces of evidence regarding consumption behavior found by Kuznets? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers