Real Income Stagnation of Countries, 1960-2001

Journal of Development Studies, Vol. 45, No. 1, 2009

27 Pages Posted: 15 Sep 2005 Last revised: 28 Apr 2011

See all articles by Sanjay G. Reddy

Sanjay G. Reddy

The New School - Department of Economics

Camelia Minoiu

Federal Reserve Board

Date Written: March 9, 2007

Abstract

This paper examines the phenomenon of real-income stagnation (in which real-income growth is uninterruptedly negligible or negative for a sizable sequence of years). We analyze data for four decades from a large cross-section of countries. Real income stagnation is a conceptually distinct phenomenon from low average growth and other features of the growth sequence that have been previously considered. We find that real income stagnation has affected a significant number of countries (103 out of 168), and resulted in substantial income loss. Countries that suffered spells of real income stagnation were more likely to be poor, in Latin America or sub-Saharan Africa, conflict ridden and dependent on primary commodity exports. Stagnation is also very likely to persist over time. Countries that were afflicted with stagnation in the 1960s had a likelihood of seventy-five percent of also being afflicted with stagnation in the 1990s.

Keywords: real income stagnation, patterns of economic growth

JEL Classification: O10, O11, O47

Suggested Citation

Reddy, Sanjay G. and Minoiu, Camelia, Real Income Stagnation of Countries, 1960-2001 (March 9, 2007). Journal of Development Studies, Vol. 45, No. 1, 2009. Available at SSRN: https://ssrn.com/abstract=799824

Sanjay G. Reddy (Contact Author)

The New School - Department of Economics ( email )

Room 1116
6 East 16th Street
New York, NY 10003
United States

Camelia Minoiu

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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