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Short-lived shocks with long-lived impacts?

by Michael Lokshin

Econometric modelsEquilibrium (Economics)Income

In theory it is possible that a vulnerable household will never recover from a sufficiently large but short-lived shock to its income, which could explain the persistent poverty that has emerged in many transition economies. But this study for Hungary shows that, in general, households bounce back from transient shocks, although not rapidly.

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For young readers

Book data: Open Library