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Has the world converged? A robust analysis of non-monetary bounded indicators

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  • Suman Seth

    () (Leeds University Business School and OPHI, U.K.)

  • Gaston Yalonetzky

    () (Leeds University Business School, U.K.)

Abstract

Most non-monetary development indicators are bounded and many of them are presented in terms of either attainments or shortfalls. Whether an absolute approach or a relative approach should be undertaken to assess cross-country convergence of these indicators has been a subject of debate. Revisiting this debate, we provide three arguments explaining why a relative approach is misleading and, instead, an absolute approach is more appropriate. We assess the presence of absolute convergence across countries in several non-monetary development indicators by applying a number of absolute inequality indices. Although we find numerous instances of absolute convergence, these are rarely robust to alternative specifications of indices. We additionally contribute to the available methodological toolkit of convergence analysis by employing absolute-Lorenz curves to assess the robustness of absolute cross-country convergence, which is rarely conducted in the literature, and never to date with absolute-Lorenz curves. We also clarify the relationship between different relevant notions of egalitarian progress and elucidate how progress in these indicators relates to changes in their convergence using absolute Lorenz curves.

Suggested Citation

  • Suman Seth & Gaston Yalonetzky, 2016. "Has the world converged? A robust analysis of non-monetary bounded indicators," Working Papers 398, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2016-398
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2016-398.pdf
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    More about this item

    Keywords

    Absolute convergence; non-monetary development indicators; absolute Lorenz curve; egalitarian progress; bounded indicators; consistent inequality indices.;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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