Answer to Question #63069 in Macroeconomics for Rubengo rubengo

Question

How distribution relate to poverty

Answer 1

Income distribution and poverty represent two aspects of the same process of development. They are different categories but their estimates are based on indicators of the national income and population of the country.
The distribution of the benefits within the country deteriorates the influence of the growth on the poor. The distribution of the income, and, as a result, income shares of different groups of the population and changes in these shares have an impact on the further evolution of the poverty. The higher inequality is, the more likely the poor will be suffering from the growth in a country. It will bring to the increasing of the inequality. As a result, the level of the poverty will increase.

To overcome the high level of the poverty, governmental policy measures should concentrate on the following:
- Stimulating of the inclusive growth;
- Creating of the productive employment;
- Redistributing incomes ;
- Reallocating assets;
- Accepting pro-poor policies at the macroeconomic level.
Unequal distribution of the income raises the poverty among the country. People who need money to satisfy basic needs do not have it. At the same time, a rich segment of the population saves more and

more money. That brings the necessity of the redistribution of the income within the country in order to

reduce the poverty.