Global Growth and Distribution : Are China and India Reshaping the World?

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 growth is 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.

Bibliographic Details

Main Authors:	Bussolo, Maurizio, De Hoyos, Rafael E., Medvedev, Denis, van der Mensbrugghe, Dominique
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2007-11
Subjects:	ACCELERATOR, ACCOUNTING, AGGREGATE GROWTH, AGRICULTURAL OUTPUT, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, AGRICULTURE, AMOUNT OF SAVINGS, ANNUAL RATE, AVERAGE ANNUAL, AVERAGE GROWTH, AVERAGE INCOME, AVERAGE INCOMES, AVERAGE RATE, BASE YEAR, CALCULATION, CALCULATIONS, CAPITAL ACCUMULATION, CAPITAL STOCKS, COMPARATIVE ADVANTAGE, COMPETITIVENESS, CONSTANT PRICE, CONSTANT PRICES, CONSUMER, CONSUMER BEHAVIOR, CONSUMERS, CONTRIBUTION, CONTRIBUTIONS, COUNTRY INEQUALITY, DECOMPOSITION ANALYSIS, DECOMPOSITION RESULTS, DEMOGRAPHIC, DEMOGRAPHIC CHANGE, DEMOGRAPHIC CHANGES, DEMOGRAPHIC SHIFTS, DEVELOPED COUNTRIES, DEVELOPED ECONOMIES, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPING ECONOMIES, DEVELOPING REGIONS, DEVELOPING WORLD, DEVELOPMENT ECONOMICS, DEVELOPMENT GOALS, DISTRIBUTION OF INCOME, DISTRIBUTIONAL CHANGES, DISTRIBUTIONAL EFFECT, DISTRIBUTIONAL EFFECTS, DIVERGENT PATHS, DOMESTIC SAVINGS, EARNINGS, ECONOMIC ACTIVITY, ECONOMIC EXPANSION, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, ECONOMIC POLICY, ECONOMIC RESEARCH, ECONOMIC REVIEW, ECONOMIC TRENDS, EDUCATIONAL SERVICES, EMERGING ECONOMIES, EMPIRICAL ANALYSIS, EMPIRICAL RESULTS, EMPIRICAL STUDIES, EXCHANGE RATE, EXCHANGE RATES, EXOGENOUS CHANGES, EXPORTS, FACTOR PRICES, FERTILITY RATES, FORECASTS, FUTURE INCOME, GDP, GENERAL EQUILIBRIUM MODEL, GINI COEFFICIENT, GLOBAL ECONOMIC PROSPECTS, GLOBAL ECONOMY, GLOBAL EXPORTS, GLOBAL LEVEL, GLOBAL MARKET, GLOBAL MARKETS, GLOBAL OUTPUT, GLOBALIZATION, GROWTH IN TRADE, GROWTH MODEL, GROWTH MODELS, GROWTH PERFORMANCE, GROWTH PROCESS, GROWTH PROSPECTS, GROWTH RATE, GROWTH RATES, HIGH GROWTH, HIGH INCOME COUNTRIES, HIGH URBANIZATION, HISTORICAL PERSPECTIVE, HOUSEHOLD INCOMES, HOUSEHOLD SURVEYS, HOUSEHOLD WELFARE, HUMAN CAPITAL, INCOME, INCOME DATA, INCOME DIFFERENCES, INCOME DISPARITIES, INCOME DISTRIBUTION, INCOME DISTRIBUTIONS, INCOME GROUP, INCOME GROUPS, INCOME INEQUALITY, INCOME LEVEL, INCOME RANGES, INCOME STUDY, INCOMES, INCREASE IN INCOME, INCREASING INEQUALITY, INDIVIDUAL COUNTRIES, INEQUALITY, INEQUALITY DECOMPOSITION, INEQUALITY WILL, INTERNATIONAL CAPITAL, INTERNATIONAL TRADE, INVESTMENT BEHAVIOR, LABOR FORCE, LABOR FORCE GROWTH, LABOR MARKET, LABOR PRODUCTIVITY, LABOUR FORCE, LIFE EXPECTANCY, LIVING STANDARDS, LOCAL CURRENCY, LONG-TERM RATE, MACROECONOMIC ANALYSIS, MACROECONOMIC IMPLICATIONS, MACROECONOMIC OUTCOMES, MACROECONOMIC POLICY, MARKET SHARES, MARKETING, MEASUREMENT ERRORS, MEDIAN VOTER, MICRO DATA, MIDDLE CLASS, MIDDLE INCOME COUNTRIES, MIDDLE INCOME COUNTRY, MORTALITY RATES, MULTILATERAL TRADE, NATIONAL INCOME, NATURAL RESOURCES, NEW JOBS, OLDER PEOPLE, PER CAPITA GROWTH, PER CAPITA INCOME, PER CAPITA INCOMES, POLICY RESEARCH, POOR COUNTRIES, POPULATION GROWTH, POPULATION GROWTH RATES, POPULATION SUBGROUPS, POVERTY LINE, POVERTY REDUCTION, POWER PARITY, PRIVATE CONSUMPTION, PROBABILITIES, PROBABILITY, PRODUCTIVITY GROWTH, PURCHASING POWER, RAPID GROWTH, RATES OF RETURN, REAL EXCHANGE RATES, REAL GDP, REAL INCOME, REAL OUTPUT, RELATIVE INCOMES, RELATIVE POSITION, RELATIVE SHIFT, RELATIVE WAGES, RETIREMENT, RETIREMENT AGE, RICH COUNTRIES, SAVINGS, SECTORAL COMPOSITION, SKILL LEVEL, SKILL PREMIUM, SKILLED WAGE, SKILLED WAGES, SKILLED WORKERS, SOCIAL WELFARE, STOCKS, STRUCTURAL CHANGE, SUB-SAHARAN AFRICA, TAX, TECHNOLOGICAL CHANGES, TOTAL FACTOR PRODUCTIVITY, TOTAL OUTPUT, TRADE NEGOTIATIONS, TRANSPARENCY, TRINIDAD AND TOBAGO, UNEQUAL DISTRIBUTION, UNSKILLED WORKERS, URBANIZATION, WAGE DIFFERENTIALS, WAGE GAP, WAGE GAPS, WEALTH, WELFARE BENEFITS, WORKING AGE, WORKING AGE POPULATION, WORLD ECONOMY, WORLD INCOME DISTRIBUTION, WORLD INEQUALITY, WORLD MARKETS, WORLD TRADE, WORLD TRADE ORGANIZATION, WORTH, YOUNGER COHORTS, YOUNGER POPULATIONS,
Online Access:	http://documents.worldbank.org/curated/en/2007/11/8682142/global-growth-distribution-china-india-reshaping-world http://hdl.handle.net/10986/7601
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