Francois Bourguignon’s and Christian Morrisson’s
Inequality among World Citizens 1820-1992 American Economic Review, ., 2002) Review, Vol. 92, No. 4 (Sep (Sep.,
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why growt • Change – the only certain thing • A stitch in time saves nine
• Unequally equal or equally unequal? • 1820: from Gini=0.16 to Gini=0.50 in no time
Joanna Nestorowicz
Measuring • GDP pc PPP • population • 11 income groups in each country: 9 deciles and 2 vintiles • Mean world income • World population • Poverty and extreme poverty (headcount and %)
• Gini • Theil • logs
+ Any people Gini + Any economy + Any population - US vs EU + Any change - What is income, what is not? - Household vs individual? - Different shape, same area ! 0.3 – 0.4 threshold ! G < 0.4: good ! G > 0.4: bad
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Gini worldwide Theil Index
+ Weighted sum of subgroups
! T: <0, lnN>
Source: wikipedia.org
2
M 90
t
o
b
l
i
i
y
84,6 78,8
78,3
80
71,4
70 60 50
Immobility
40
Upward Downward
30 19,6 20 10
14,4
12,4 3
1,6
15,2 11,4
4,2
0 1820-1870
‘wow’ facts • We live, on average, 2.5 times longer then in 1820 • Income differences between ‘North’ and ‘South’ changed from 1:3 in 1820 to 1:9 in 1992 • Inequality in Europe is as it was in 1820 • The ‘typical’ world economies are in South America • Every third person living below the world median income lives in Africa • In 70 7ears Europe & Co. was better off by 400%, in the same time it was 10% for India • Asia 1820-1950: 2/3 of world’s population ‘grew’ 6x slower then the West • UK vs. Chinese GDP in 1950 was like 10:1, now it is less then 5:1, just as 100 years ago • At the beginning of the 19th century we were all different, but all equal
1870-1910
1910-1950
1950-1992
Sources of changes Equalizing factors: • equalizing of incomes within Western European countries, Russia and Eastern Europe in the between war period and after WWII • European countries catch-up to the US after WWII • China’s growth • Rapid growth of Asian Tigers (not very significant though due to small population)
Disequalizing factors: • consistently better economic performance of European countries and their offshoots • poor growth performances of China and India until late 20th century • divergence between Anglo-Saxon and the other European countries (first half of the 19th century) • slow growth of Africa in the second half of the 20th century
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Quo vadis mundo? • Gini has leveled off since 1950 but... • • • •
Will there still be inter-regional divergence? Will there still be intra-regional convergence? Will this lead to a worldwide polarization of income groups? Will semi-peripheries still exist?
• Will there be will to change for better?
Thank you
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