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Growth and Poverty Revisited

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In the 1960s, economic growth seemed to be the tonic for poverty. From 1960 to 1969, real gross domestic product (GDP) grew at a 4.1 percent average annual rate, while the percentage of all persons in poverty declined at an annualized 5.9 percent. Had the 1960s' relationship between real GDP growth and poverty reduction been maintained, the share of all Americans in poverty, or the "poverty rate," would have been only 8.2 percent by 1992. The actual 1992 poverty rate, however, was nearly twice as large.

In the 1960s, economic growth seemed to be the tonic for poverty. From 1960 to 1969, real gross domestic product (GDP) grew at a 4.1 percent average annual rate, while the percentage of all persons in poverty declined at an annualized 5.9 percent. Had the 1960s' relationship between real GDP growth and poverty reduction been maintained, the share of all Americans in poverty, or the "poverty rate," would have been only 8.2 percent by 1992. The actual 1992 poverty rate, however, was nearly twice as large.


Suggested citation: Powers, Elizabeth T., 1995. "Growth and Poverty Revisited," Federal Reserve Bank of Cleveland, Economic Commentary, 04.15.1995.

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