What does the two gap model of poverty trap say?   Poverty arises when the rate of return on capital exceeds the growth rate of income.   Poverty arises from the gap between savings and investment and can be remedied by foreign aid.   Poverty arises when capital market imperfections restrict the amount individuals can borrow.   Poverty arises when a country invests in the traditional sector with constant returns to scale, and not in the modern sector with increasing returns.

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