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A Forward Projection of the Cross-Country Income Distribution


  • Costas Azariadis

    () (Department of Economics, University of California Los Angeles)

  • John Stachurski

    () (Institute of Economic Research, Kyoto University)


This paper proposes and implements a method to predict evolution of the crosscountry income distribution from a nonconvex growth model with unbounded productivity shocks, fitted to panel data by threshold autoregresion. We estimate the stochastic kernel of the process, and define inducively all future distributions as a norm-convergent sequence in the function space L1. Elements of the sequence are calculated using Monte Carlo simulation. Our results suggest that nonlinearities in the growth process are responsible for emerging bimodality in the distribution of income, but that such bimodality eventually peaks and declines. In the long run we predict convergence.

Suggested Citation

  • Costas Azariadis & John Stachurski, 2003. "A Forward Projection of the Cross-Country Income Distribution," KIER Working Papers 570, Kyoto University, Institute of Economic Research.
  • Handle: RePEc:kyo:wpaper:570

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    References listed on IDEAS

    1. Richard Florida, 2002. "Bohemia and economic geography," Journal of Economic Geography, Oxford University Press, vol. 2(1), pages 55-71, January.
    2. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-851, July.
    3. Carole Juliette Maignan (ed.) & Gianmarco Ottaviano (ed.) & Dino Pinelli (ed.), 2003. "Economic Growth, Innovation, Cultural Diversity. What Are We All Talking About? A Critical Survey of the State-of-the-art," Working Papers 2003.12, Fondazione Eni Enrico Mattei.
    4. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5 Elsevier.
    2. Blackburn, Keith & Forgues-Puccio, Gonzalo F., 2007. "Distribution and development in a model of misgovernance," European Economic Review, Elsevier, vol. 51(6), pages 1534-1563, August.
    3. Keith Blackburn & Gonzalo F. Forgues-Puccio, 2011. "Foreign Aid - a Fillip for Development or a Fuel for Corruption?," CDMA Working Paper Series 201107, Centre for Dynamic Macroeconomic Analysis.
    4. Kraay, Aart & Raddatz, Claudio, 2007. "Poverty traps, aid, and growth," Journal of Development Economics, Elsevier, vol. 82(2), pages 315-347, March.
    5. Riccardo DiCecio & Charles S. Gascon, 2008. "Convergence in the United States: a tale of migration and urbanization," Working Papers 2008-002, Federal Reserve Bank of St. Louis.
    6. Riccardo DiCecio & Charles Gascon, 2010. "Income convergence in the United States: a tale of migration and urbanization," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(2), pages 365-377, October.
    7. Humberto López & Luis Servén, 2015. "Too Poor to Grow," Central Banking, Analysis, and Economic Policies Book Series,in: Ricardo J. Caballero & Klaus Schmidt-Hebbel (ed.), Economic Policies in Emerging-Market Economies Festschrift in Honor of Vittorio Corbo, edition 1, volume 21, chapter 13, pages 309-350 Central Bank of Chile.
    8. Sungil Kwak & Stephen C. Smith, 2013. "Regional Agricultural Endowments and Shifts of Poverty Trap Equilibria: Evidence from Ethiopian Panel Data," Journal of Development Studies, Taylor & Francis Journals, vol. 49(7), pages 955-975, July.
    9. Daniel J. Henderson & Christopher F. Parmeter & R. Robert Russell, 2008. "Modes, weighted modes, and calibrated modes: evidence of clustering using modality tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(5), pages 607-638.
    10. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5 Elsevier.
    11. Fotopoulos, Georgios, 2006. "Nonparametric analysis of regional income dynamics: The case of Greece," Economics Letters, Elsevier, vol. 91(3), pages 450-457, June.

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