04
Apr 2016

14:15 - 15:45
IWH Research Seminar

Cross-country Income Levels Over Time: Did the Developing World Suddenly Become Much Richer?

The latest global survey on relative prices and income levels, for the year 2011, showed changes to relative income levels that were larger in lower-income countries, thereby narrowing the world income distribution compared to estimates based on the 2005 survey.

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Robert Inklaar  (University of Groningen)
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IWH conference room
Robert Inklaar

Zur Person

Robert Inklaar is an associate professor at the department of Global Economics and Management of the University of Groningen and participant in the Groningen Growth and Development Centre of the University of Groningen. His research is focused on output and productivity across countries and over time, and the role of the financial sector in economic performance.

The latest global survey on relative prices and income levels, for the year 2011, showed changes to relative income levels that were larger in lower-income countries, thereby narrowing the world income distribution compared to estimates based on the 2005 survey. This paper examines whether changes in measurement methodology between the 2011 survey and the previous survey for 2005 can explain these large differences. We construct a counterfactual set of relative prices for 2005 that harmonizes measurement, and we no longer find systematic differences across income levels, implying that international income inequality based on the 2005 survey was overstated.

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