Economics

Low Level Equilibrium Trap

Low Level Equilibrium Trap

The low level equilibrium trap is a concept in economics produced by Richard R. Nelson, during which at low amounts of per capita income consumers are too poor to avoid wasting and invest much, and this low level of investment results inside low rate regarding growth in nation’s income. As per capita earnings rises above a clear minimum level from which there is absolutely no saving, a rising percentage of income is going to be saved and invested this also will lead to higher rate of expansion in income.