Wednesday, April 4, 2018

C.P. Chandrasekhar and Jayati Ghosh — How unequal are world incomes?

In discussions of global inequality, there is general agreement that, whatever else may have happened, within-country inequality has increased in most cases, even as between-country inequality has come down. But overall, because of the recent emergence of countries with large populations like China and India, there has actually been some reduction in global inequality, because of increasing incomes in the “middle” of the global distribution....
This is what gave rise to the famous “elephant curve” first described by the economist Branko Milanovic, which described percentage changes in income across different deciles of the global population. This showed a strong percentage growth in the middle of the global income distribution (the back of the elephant), much lower growth in the second decile, and a higher growth in the top decile (the trunk of the elephant).
But there are two important caveats to this....
So don't believe it when you hear that inequality is decreasing globally, based on selective reading of data.
So the much-vaunted global income convergence seems much more like a coming together of elites in rich and emerging market economies, excluding out the bulk of the population everywhere.
Real-World Economics Review Blog
How unequal are world incomes?
C.P. Chandrasekhar and Jayati Ghosh

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