34 Pages Posted: 11 Jun 2003
Date Written: November 2002
The paper discusses recent world income inequality calculations by Sala-i-Martin. It shows that the two main problems with which the author had to grapple (too few data to derive countries' income distributions, and sparseness of such data in time) are not solved in a satisfactory fashion. They, and several other simplifying assumptions, make Sala-i-Martin results very dubious. We argue that Sala-i-Martin has ended up by producing a population-weighted inter-national distribution of income augmented by a constant shift parameter and not a distribution of income among world citizens.
Keywords: Income inequality, world inequality, globalization
JEL Classification: D31, I3, 057
Suggested Citation: Suggested Citation
Milanovic, Branko, The Ricardian Vice: Why Sala-i-Martin's Calculations of World Income Inequality are Wrong (November 2002). Available at SSRN: https://ssrn.com/abstract=403020