The Global Inequality Boomerang

Ravi Kanbur, Eduardo Ortiz-Juarez () and Andy Sumner ()
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Eduardo Ortiz-Juarez: King’s College London
Andy Sumner: King’s College London

No 615, Working Papers from Center for Global Development

Abstract: The decline in global inequality over the last decades has spurred a "sunshine" narrative of falling global inequality that has been rather oversold, in the sense, we argue, it is likely to be temporary. Our work first formalizes the intuition that the fall in global inequality will eventually reverse. We derive the location of the turning point for a specific measure of inequality: the mean log deviation. We make use of a custom-built database of global income to estimate this turning point. We find there is a potentially startling global inequality "boomerang," possibly in the mid-to-late 2020s, which would have happened even if there were no pandemic, and that the pandemic is likely to bring forward the global inequality boomerang. The scholarly significance of the main finding is that there is a new type of Kuznets curve, where inequality first falls and then rises as middle-income countries grow fast and approach the income levels of rich countries. The policy significance is that interventions to counteract the upward movement in global inequality will require even stronger focus on lowering the within-country inequality component of global inequality.

Keywords: global inequality; inequality boomerang; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: D31 D63 O15 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2022-05-06
New Economics Papers: this item is included in nep-dev, nep-lam and nep-ltv
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Global Inequality Boomerang (2022)
Working Paper: The global inequality boomerang (2022)
Working Paper: The global inequality boomerang (2022)
Working Paper: The Global Inequality Boomerang (2022)
Working Paper: The global inequality boomerang (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:615

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