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Inequality convergence

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  • Ravallion, Martin

Abstract

Comparing changes in inequality with initial levels, using new data, the author finds that within-country inequality in income or per capita consumption is converging toward medium levels--a Gini index around 40 percent. The finding is robust to allow for serially independent measurement error in inequality data and for short-run dynamics around longer-term trends. However, the convergence process is neither rapid nor certain, and more observations over time are needed to be confident of the pattern. The author offers an approach to modeling the determinants of inequality that may be a starting point for estimating richer models.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 80 (2003)
Issue (Month): 3 (September)
Pages: 351-356

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Handle: RePEc:eee:ecolet:v:80:y:2003:i:3:p:351-356

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References

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  1. Bénabou, Roland, 1996. "Inequality and Growth," CEPR Discussion Papers 1450, C.E.P.R. Discussion Papers.
  2. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January.
  3. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
  4. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-91, September.
  5. Durlauf,S.N. & Quah,D.T., 1998. "The new empirics of economic growth," Working papers 3, Wisconsin Madison - Social Systems.
  6. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, World Bank Group, vol. 11(2), pages 357-82, May.
  7. Bruno, Michael & Ravallion, Martin & Squire, Lyn, 1996. "Equity and growth in developing countries : old and new perspectives on the policy issues," Policy Research Working Paper Series 1563, The World Bank.
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