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  • 1.
    Radetzki, Marian
    et al.
    Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Social Sciences.
    Jonsson, Bo
    Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Social Sciences.
    The expanding global income gap: how reliable is the evidence?2002In: European Journal of Development Research, ISSN 0957-8811, E-ISSN 1743-9728, Vol. 14, no 1, p. 243-263Article in journal (Refereed)
    Abstract [en]

    Employing exchange rate determined per capita GDPs, the paper demonstrates a very sharp increase in global income inequality. In 1960, the gap between country groups representing the poorest & richest population deciles equaled 40, & there were widespread fears that the large income gap was a threat to sustainable global economic expansion. By 1995, the poor group per capita incomes had declined by almost 50% in real terms, & the gap had widened to 140. These findings are in sharp contrast to the results from the increasingly fashionable assessments employing PPP-adjusted income figures. The latter show a positive income trend for the poorest decile, & an insignificant increase in the rich/poor income gap. It is well known that exchange rate determined international GDP comparisons exaggerate the income gaps between rich & poor nations. But it is far from obvious that PPP adjustments yield results that are superior to those obtained with the help of exchange rates, when the relative gaps are compared at different points in time, or when per capita incomes are tracked over long time periods in individual countries or country groups. Our dramatic results, therefore, represent a very important second opinion on what has happened to global income distribution. 9 Tables, 2 Figures, 29 References. Adapted from the source document

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