DP3316 One Third of the World's Growth and Inequality

Author(s): Danny Quah
Publication Date: April 2002
Keyword(s): china, distribution dynamics, gini coefficient, headcount index, india, poverty, world individual income distribution
JEL(s): D30, O10, O57
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3316

This Paper studies growth and inequality in China and India ? two economies that account for a third of the world?s population. By modelling growth and inequality as components in a joint stochastic process, the Paper calibrates the impact each has no different welfare indicators and on the personal income distribution across the joint population of the two countries. For personal income inequalities in a China-India universe, the forces assuming first-order importance are macroeconomic ? growing average incomes dominate all else. The relation between aggregate economic growth and within-country inequality is insignificant for inequality dynamics.