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Perspectives on the World Income Distribution: Beyond Twin Peaks Towards Welfare Conclusions

  • Weisbrod, Julian
  • Vollmer, Sebastian
  • Holzmann, Hajo

This paper contributes towards the growing debate concerning the world distribution of income and its evolution over that past three to four decades. Our methodological approach is twofold. First, we formally test for the number of modes in a cross-sectional analysis where each country is represented by one observation. We contribute to existing studies with technical improvements of the testing procedure, enabling us to draw new conclusions, and an extension of the time horizon being analyzed. Second, we estimate a global distribution of income from national log-normal distributions of income, as well as a global distribution of log-income as a mixture of national normal distributions of log-income. From this distribution we obtain measures for global inequality and poverty as well as global growth incidence curves.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Göttingen 2007 with number 32.

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Date of creation: 2007
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Handle: RePEc:zbw:gdec07:6555
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  1. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  2. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, vol. 106(437), pages 1019-36, July.
  3. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-55, July.
  4. Ravallion, M. & Datt, G., 1991. "Growth and Redistribution Components of Changes in Poverty Measures," Papers 83, World Bank - Living Standards Measurement.
  5. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  6. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
  7. Carola Grün & Stephan Klasen, 2004. "Growth, Inequality and Well-Being: Comparisons across Space and Time," HEW 0401001, EconWPA.
  8. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
  9. Kremer, Michael & Onatski, Alexei & Stock, James, 2001. "Searching for prosperity," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 275-303, December.
  10. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-69, July.
  11. Xavier Sala-i-Martin, 2001. "The disturbing 'rise' of global income inequality," Economics Working Papers 616, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2002.
  12. Theil, Henri & Theil, Henri, 1979. "World income inequality and its components," Economics Letters, Elsevier, vol. 2(1), pages 99-102.
  13. T. Paul Schultz, 1998. "Inequality in the Distribution of Personal Income in the World: How it is Changing and Why," Working Papers 784, Economic Growth Center, Yale University.
  14. François Bourguignon, 2002. "The growth elasticity of poverty reduction : explaining heterogeneity across countries and time periods," DELTA Working Papers 2002-03, DELTA (Ecole normale supérieure).
  15. Theo S Eicher & Cecilia Garcia Penalosa, . "Inequality and Growth," Discussion Papers in Economics at the University of Washington 0083, Department of Economics at the University of Washington.
  16. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," CEPR Discussion Papers 3316, C.E.P.R. Discussion Papers.
  17. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  18. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
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