• Kuznets Hypothesis (Inverted-U Curve): Formulated by Nobel laureate Simon Kuznets (1955), this hypothesis postulates that in the initial stages of economic growth and industrialization, income inequality increases as labor shifts from rural agriculture to high-wage urban industrial sectors. As economic growth matures and per capita income continues to rise, democratic pressures, social welfare investments, progressive taxation, and widespread education stabilize and eventually reduce income disparity, generating an inverted U-shaped relationship between GDP per capita and income inequality ($Gini$ coefficient).
• Nurkse Hypothesis: Ragnar Nurkse proposed the concept of the vicious circle of poverty in underdeveloped economies, where low real income leads to low capacity to save, resulting in low investment, capital deficiency, low productivity, and perpetually low income.
• Myrdal Hypothesis: Gunnar Myrdal proposed the theory of circular cumulative causation, explaining that regional economic development creates unequal development through powerful backwash effects (outflow of capital and skilled labor from peripheral regions to core growth centers) that often overpower positive spread effects.
• Reinert Hypothesis: Erik Reinert emphasizes uneven economic development driven by increasing returns in industrial production versus diminishing returns in agrarian resource-extraction economies.

Correct option: (1) Kuznet hypothesis