Global growth and distribution: are China and India reshaping the world?

Maurizio Bussolo, Rafael De Hoyos, Denis Medvedev and Dominique van der Mensbrugghe ()

No 4392, Policy Research Working Paper Series from The World Bank

Abstract: Over the past 20 years, aggregate measures of global inequality have changed little even if significant structural changes have been observed. High growth rates of China and India lifted millions out of poverty, while the stagnation in many African countries caused them to fall behind. Using the World Bank's LINKAGE global general equilibrium model and the newly developed Global Income Distribution Dynamics (GIDD) tool, this paper assesses the distribution and poverty effects of a scenario where these trends continue in the future. Even by anticipating a deceleration, growth in China and India is a key force behind the expected convergence of per-capita incomes at the global level. Millions of Chinese and Indian consumers will enter into a rapidly emerging global middle class-a group of people who can afford, and demand access to, the standards of living previously reserved mainly for the residents of developed countries. Notwithstanding these positive developments, fast growthis often characterized by high urbanization and growing demand for skills, both of which result in widening of income distribution within countries. These opposing distributional effects highlight the importance of analyzing global disparities by taking into account - as the GIDD does - income dynamics between and within countries.

Keywords: Inequality; Economic Theory&Research; Emerging Markets; Achieving Shared Growth (search for similar items in EconPapers)
Date: 2007-11-01
New Economics Papers: this item is included in nep-cna, nep-cwa and nep-dev
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/wps4392.pdf (application/pdf)

Related works:
Working Paper: Global Growth and Distribution: Are China and India Re shaping the World? (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:4392

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().