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Global inequality recalculated: The effect of new 2005 PPP estimates on global inequality

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  • Milanovic, Branko

Abstract

The results of new direct price level comparisons across 146 countries in 2005 have led to large revisions of PPP (purchasing power parity) exchanges rates, particularly for China and India. The recalculation of international and global inequalities, using the new PPPs, shows that inequalities are substantially higher than previously thought. Inequality between global citizens is estimated at 70 Gini points rather than 65 as before. The richest decile receives 57 percent of global income rather than 50 percent.

Suggested Citation

  • Milanovic, Branko, 2009. "Global inequality recalculated: The effect of new 2005 PPP estimates on global inequality," MPRA Paper 16538, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16538
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    References listed on IDEAS

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    1. Sanjay Reddy & Camelia Minoiu, 2009. "Real Income Stagnation of Countries 1960-2001," Journal of Development Studies, Taylor & Francis Journals, vol. 45(1), pages 1-23.
    2. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    3. Milanovic, Branko, 2007. "An even higher global inequality than previously thought," MPRA Paper 6676, University Library of Munich, Germany.
    4. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    5. Lant Pritchett, 1997. "Divergence, Big Time," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 3-17, Summer.
    6. Shaohua Chen & Martin Ravallion, 2010. "The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, Oxford University Press, vol. 125(4), pages 1577-1625.
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    Citations

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    Cited by:

    1. Yin‐Wong Cheung & Eiji Fujii, 2014. "Exchange Rate Misalignment Estimates—Sources Of Differences," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 19(2), pages 91-121, March.
    2. Vladimir Popov, 2010. "Development theories and development experience: half a century journey," Working Papers w0153, Center for Economic and Financial Research (CEFIR).
    3. Majid, Nomaan., 2009. "The global recession and developing countries," ILO Working Papers 994482673402676, International Labour Organization.
    4. Jan Fagerberg, 2010. "The Changing Global Economic Landscape: The Factors that Matter," Chapters,in: The Shape of the Division of Labour, chapter 1 Edward Elgar Publishing.
    5. Popov, Vladimir, 2015. "Catching Up: Developing Countries in Pursuit of Growth," MPRA Paper 65878, University Library of Munich, Germany.
    6. repec:ilo:ilowps:448267 is not listed on IDEAS
    7. Popov, Vladimir, 2015. "Разрыв Между Югом И Западом По Уровню Экономического Развития Сокращается?
      [Catching up: Developing countries in pursuit of growth]
      ," MPRA Paper 65893, University Library of Munich, Germany.
    8. Milanovic, Branko, 2011. "A short history of global inequality: The past two centuries," Explorations in Economic History, Elsevier, vol. 48(4), pages 494-506.
    9. Peter H. Lindert, 2016. "Purchasing Power Disparity before 1914," NBER Working Papers 22896, National Bureau of Economic Research, Inc.
    10. Fagerberg , Jan & Srholec , Martin, 2015. "Capabilities, Competitiveness, Nations," Papers in Innovation Studies 2015/2, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.

    More about this item

    Keywords

    Global inequality; Purchasing power parity;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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