Exchange Rates, Productivity, Poverty and Inequality

Kenneth Clements and Yihui Lan
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Yihui Lan: UWA Business School, The University of Western Australia

No 04-13, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: This paper analyses differences in the wealth of nations by comparing PPP-based cross-country incomes from the Penn Table with those derived from prevailing exchange rates. Using the Balassa (1964)-Samuelson (1964) productivity bias framework, we introduce the “international poverty line” and illustrate the implications for cross-county income inequality. We demonstrate that our results are not inconsistent with the previous literature when appropriately interpreted.

Pages: 11 pages
Date: 2004
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Related works:
Journal Article: Exchange rates, productivity, poverty and inequality (2007)
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