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Sunday, October 27, 2013

'The Changing Shape of the World Income Distribution Over the Past Generation'

Stolen from Brad DeLong:

John McDermott Reads Branco Milanovic on the Changing Shape of the World Income Distribution Over the Past Generation: Stolen from FT Alphaville, in turn stolen from John McDermott, in turn stolen from Branco Milanovic:

The chart that explains the world FT Alphaville

Note that these are not the changes in income of individuals in the world economy. Rather, they are the changes in the incomes associated with particular percentile slots in the world economy. Your average citizen of China is in a much higher percentile of the income distribution today than twenty years ago.
Also note that Milanovic's numbers on the prosperity of the pre-1991 Communist Bloc have always looked to me to be considerably higher than reality--they have never seemed to me to make adequate allowances for quality, variety, and the hassle factor involved in obtaining goods and services in a centrally-planned really existing-socialist economy.
Plus I am a techno-optimist: I see the coming of internet access as contributing an enormous amount to human well-being via consumer surplus that is simply not captured by standard GDP accounts.
Nevertheless, the (relative) failure of development for the 75-90 percentile of the world income distribution over 1988-2008 is a fact, a fascinating one, and a somewhat terrifying one.
Now let me give the mike to John McDermott: ...

    Posted by on Sunday, October 27, 2013 at 06:48 PM in Economics, Income Distribution | Permalink  Comments (9)


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