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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 148 countries in 2005 have led to large revisions of purchasing power parity exchanges rates, particularly for China and India. The recalculation of international and global inequalities, using the new purchasing power parity rates, 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," Policy Research Working Paper Series 5061, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5061
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    References listed on IDEAS

    as
    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. World Bank, 2008. "Global Purchasing Power Parities and Real Expenditures : 2005 International Comparison Program," World Bank Publications - Books, The World Bank Group, number 21558, December.
    3. 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.
    4. 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.
    5. 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.
    6. Lant Pritchett, 1997. "Divergence, Big Time," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 3-17, Summer.
    7. Milanovic, Branko, 2007. "An even higher global inequality than previously thought," MPRA Paper 6676, University Library of Munich, Germany.
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    More about this item

    Keywords

    Inequality; Poverty Impact Evaluation; Emerging Markets; Equity and Development; Economic Theory&Research;
    All these keywords.

    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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