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One Third of the Worlds Growth and Inequality

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Danny Quah

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Abstract

This paper studies growth and inequality in China and India û two economies that account for a third of the world's population. By modelling growth and inequality as components in a joint stochastic process, the paper calibrates the impact each has on different welfare indicators and on the personal income distribution across the joint population of the two countries. For personal income inequalities in a China-India universe, the forces assuming first-order importance are macroeconomic: growing average incomes dominate all else. The relation between aggregate economic growth and within-country inequality is insignificant for inequality dynamics.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number 0535.

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Date of creation: Jun 2002
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Handle: RePEc:cep:cepdps:0535

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Related research
Keywords: China distribution dynamics Gini coefficient headcount index India poverty world individual income distribution

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Find related papers by JEL classification:
D30 - Microeconomics - - Distribution - - - General
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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  1. Holzmann, Hajo & Vollmer, Sebastian & Weisbrod, Julian, 2007. "Perspectives on the World Income Distribution: Beyond Twin Peaks Towards Welfare Conclusions," Proceedings of the German Development Economics Conference, Göttingen 2007 32, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
    Other versions:
  2. Branko Milanovic, 2003. "The Ricardian Vice: Why Sala-i-Martin’s calculations of world income inequality are wrong," HEW 0305003, EconWPA. [Downloadable!]
  3. Duangkamon Chotikapanich & William E. Griffiths & D.S. Prasada Rao, 2005. "Estimating and Combining National Income Distributions using Limited Data," Department of Economics - Working Papers Series 926, The University of Melbourne. [Downloadable!]
    Other versions:
  4. Servaas van der Berg & Megan Louw, 2003. "Changing Patterns of South African income distribution: Towards time series estimates of distribution and poverty," Working Papers 02/2003, Stellenbosch University, Department of Economics. [Downloadable!]
    Other versions:
  5. Timothy M. Smeeding, 2002. "Globalization, Inequality, and the Rich Countries of the G-20: Evidence from the Luxembourg Income Study (LIS)," Center for Policy Research Working Papers 48, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
  6. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Heshmati, Almas, 2004. "Growth, Inequality and Poverty Relationships," IZA Discussion Papers 1338, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Heshmati, Almas, 2004. "Regional Income Inequality in Selected Large Countries," IZA Discussion Papers 1307, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Arvind Virmani, 2005. "Policy regimes, growth and poverty in India : Lessons of government failure and entrepreneurial success," Indian Council for Research on International Economic Relations, New Delhi Working Papers 170, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
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