As a follow-up to my blog post on the Pope Francis and his recent statement on economic inequality, here is what’s been happening on inequality globally. While inequality has increased within countries since 1970s — it’s not just America, gang — it’s dropped between countries. See the above chart from this study (h/t to Overcoming Bias.) When you combine the two, it looks like inequality has been declining. And the conclusion of the researchers:
First, between inequality is experiencing an unprecedented decline in the last decade. Even though the bulk of this decline is due to the performance of China and other Asian countries, we have shown that a (weaker) declining trend survives even when these countries are excluded from the analysis.
Second, within inequality, in the last decade, is increasing and almost all of its growing relevance is led by the increased level of inequality within China. As a consequence, total inequality receives two contrasting inputs. On the one hand, the powerful convergence force associated to the reduction of the Chinese gap with richer countries; on the other hand, the powerful divergence force associated both to the enlargement of the Chinese gap with poorer countries and to the greater weight of the Chinese within inequality.
Third, apart from this fundamental role played by China, the world distribution of income forty years ago does not appear fundamentally changed in most