Introduction On a global scale, the quality of life and income levels have significantly increased over the last 200 years. However, many people continue to live in extreme poverty. Recent statistical data shows that, in 2015, 705.55 million people across the globe were below a newly introduced poverty line of 1.90 international dollars per day (Roser and Ortiz-Ospina par. 2). Most of them live in developing Asian and African countries which, throughout the 20th century, underwent many economic challenges and problems that negatively affected their social-economic environments. Nowadays, they continue to face different barriers to sound economic development including various unfavorable external factors, such as fluctuations in the oil market, as well as inefficient economic policies, overpopulation, and environmental degradation (Banerjee and Duflo). It is possible to say that poverty poses a serious threat to global welfare. However, as Banerjee and Duflo state, the key to the improvement of the economic situation in the world is in the understanding of how poverty affects individual lives. Unemployment, high level of economic and social uncertainty, significant gaps between the rich and the poor, crushed hopes, and the lack of confidence in the future contribute to a complicated process of marginalization of people with low or no income and significantly deteriorate the quality of their lives. At the same time, the economic insolvency of individuals substantially supports the regress in social development at the national and global levels. For the reasons mentioned above, the investigation of poverty, its origins, and related issues is of great interest. In the given paper, we will discuss and analyze the factors contributing to the increase in poverty rates, review the consequences and effects of poverty on individuals and the society as a whole, and outline possible solutions to the problem. The book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Banerjee and Duflo will be used as a primary source because it provides a comprehensive outlook on the topic. Additionally, we will retrieve findings from a few other recent scholarly sources. Nature of Poverty In their book, Banerjee and Duflo note that, in the modern economic-political discourse, there are two dominant perspectives on poverty − some researchers regard it as a sustainable phenomenon, while others tend to believe that people can be relieved of it. The concept “poverty trap” implies that, as a rule, a low-income level leads to the worsening of individuals’ well-being and social degradation which prevents them from making any changes in their status. With limited opportunities in hand, poor people cannot get out of this trap because, “whenever the scope for growing income or wealth at a very fast rate is limited,” poverty will persist (Banerjee and Duflo). Social research in the financial sustainability of poverty supports the given idea and shows that the majority of people who are born in poverty remain poor for the rest of their lives (Rycroft 213). The opponents of the poverty trap theory consider that, by making significant efforts and adapting to circumstances, one may jump out of his or her unfavorable social-economic circle. It is apparent that subjective personal qualities, as