The Ricardian Vice: Why Sala-i-Martin's Calculations of World Income Inequality are Wrong

34 Pages Posted: 11 Jun 2003  

Branko Milanovic

World Bank - Development Research Group (DECRG); University of Maryland

Date Written: November 2002

Abstract

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

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

Branko Milanovic (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/bmilanovic

University of Maryland ( email )

College Park
College Park, MD 20742
United States

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