Is the Developing World Catching up? Global Convergence and National Rising Dispersion

The present study uses the GIDD, a CGE-microsimulation model for Global Income Distribution Dynamics, to understand the ex-ante dynamics of global income distribution. Three main robust results emerge. First, under a set of realistic assumptions, t...

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Bibliographic Details
Main Authors:	Bussolo, Maurizio, De Hoyos, Rafael E., Medvedev, Denis
Format:	Policy Research Working Paper
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	AVERAGE GROWTH AVERAGE INCOME AVERAGE INCOMES BASE YEAR BENCHMARK CONSUMERS CONVERGENCE PROCESS COUNTRY INEQUALITY COUNTRY PERFORMANCE CUMULATIVE INCOME DECOMPOSITION ANALYSIS DEMOGRAPHIC DEMOGRAPHIC CHANGES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING REGIONS DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT GOALS DEVELOPMENT REPORT DEVELOPMENT STRATEGIES DEVELOPMENT STRATEGY DISTRIBUTION OF INCOME DISTRIBUTIONAL CHANGES DISTRIBUTIONAL EFFECT DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL IMPACT DOMESTIC MARKETS ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STRUCTURES ECONOMIC TRENDS ECONOMICS LETTERS EDUCATION LEVEL EMERGING ECONOMIES EQUAL WEIGHT EXCHANGE RATES EXOGENOUS CHANGES EXPLAINING CHANGES EXPOSURE FALLING POVERTY FERTILITY RATES FUTURE RESEARCH GDP GDP PER CAPITA GEOGRAPHIC DISTRIBUTION GINI COEFFICIENT GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL LEVEL GLOBALIZATION GROWTH RATE GROWTH RATES HOUSEHOLD INCOMES HOUSEHOLD SURVEY DATA HOUSEHOLD SURVEYS HOUSEHOLD WELFARE INCOME INCOME DATA INCOME DIFFERENCES INCOME DISPARITIES INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME GROUP INCOME GROWTH INCOME INEQUALITY INCOME LEVELS INCOME REDISTRIBUTION INCOME SHARE INDIVIDUAL INCOMES INEQUALITY CHANGES INEQUALITY CONSTANT INEQUALITY CONVERGENCE INEQUALITY INDEX INEQUALITY LEVELS INEQUALITY MEASURES INEQUALITY WILL INTERNATIONAL TRADE LABOR FORCE LIFE EXPECTANCY LOCAL CURRENCY LONG RUN LOW-INCOME COUNTRIES MACROECONOMIC MODELS MACROECONOMIC POLICIES MACROECONOMICS MEAN INCOME MEAN LOG DEVIATION MEASUREMENT ERRORS MEASURING INCOME INEQUALITY MEDIAN VOTER MICRO DATA MICRO MODEL MIDDLE CLASS MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MORTALITY RATES MULTILATERAL TRADE NATIONAL INCOME NEGATIVE RELATIONSHIP PARTICULAR COUNTRY PER CAPITA GROWTH PER CAPITA INCOME PER CAPITA INCOMES POLICY IMPLICATIONS POLICY RESEARCH POLITICAL ECONOMY POLITICAL ECONOMY IMPLICATIONS POOR COUNTRIES POOR INDIVIDUALS POPULATION GROWTH POPULATION SHARE POPULOUS COUNTRIES POSITIVE EFFECTS POVERTY LINE POVERTY REDUCTION POWER PARITY PURCHASING POWER RATE OF GROWTH REAL INCOME REDISTRIBUTION POLICIES RELATIVE DISTANCE RELATIVE INCOMES RELATIVE WAGES RICH COUNTRIES RISING INCOME INEQUALITY RISING INEQUALITY SECTORAL COMPOSITION SIMULATIONS SKILL LEVEL STRUCTURAL CHANGE TRADE LIBERALIZATION TRADE POLICY WEALTH WELL-BEING WORLD INCOME DISTRIBUTION WORLD INEQUALITY WORLD TRADE WORLD TRADE ORGANIZATION
Online Access:	http://documents.worldbank.org/curated/en/2008/09/12301739/developing-world-catching-up-global-convergence-national-rising-dispersion http://hdl.handle.net/10986/6318

Description
Summary:	The present study uses the GIDD, a CGE-microsimulation model for Global Income Distribution Dynamics, to understand the ex-ante dynamics of global income distribution. Three main robust results emerge. First, under a set of realistic assumptions, there will be a reduction in global income inequality by 2030. This potential reduction can be fully accounted for by the projected convergence in average incomes across countries, with poor and populous countries growing faster than the rest of the world. Second, this convergence process will be accompanied by a widening of income distribution in two-thirds of the developing countries; the main cause being increasing skill premia. Third, a trend that may counter-balance the potential anti-globalization sentiment is the emergence of a global middle class: a group of consumers who demand access to, and have the means to purchase, international goods and services. The results show that the share of these consumers in the global population is likely to more than double in the next 20 years. These ex-ante trends in global income distribution suggest that the mid-1990s could be seen as a turning point after which global inequality began showing a negative tendency.

Is the Developing World Catching up? Global Convergence and National Rising Dispersion

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