On another note, global income inequality fell from 2003-2013, according to a paper from the Peterson Institute. What are your thoughts on this article? Do you think this means Piketty might not be all that accurate?
"WE'VE been pointed towards this interesting chart, from a new paper by two economists at the Peterson Institute, a think-tank. It shows that development economists have much to be cheerful about. The chart shows the estimated global per-capita income distribution at three years: 2003, 2013 and 2035. From 2003 to 2013, global income inequality fell. There were fewer people bunched at extreme levels of poverty. The Gini coefficient of global inequality fell from 69 in 2003 to 65 in 2013. And median income rose from about $1,000 to $2,000 in just ten years.
The authors of the paper, Thomas Hellebrandt and Paolo Mauro, think that the next twenty years will be even better, largely thanks to rapid growth in emerging-market economies. Hundreds of millions will be lifted out of abject poverty due to strong growth in Sub-Saharan Africa. And as China's economy continues to expand, consumption patterns of people living there will start to look more like those in the West. As a result, the two economists expect global income inequality to continue to fall."
I don't think these reports mean that Piketty is necessarily inaccurate. As we saw the other day in class, the different takes on the issue of inequality can be biased by politics, and we can't say for sure that the Peterson Institute doesn't have said biases in their report. However, biases aside, if the presented information is true then it show positive progress toward lowering extreme inequality and growth in developing countries and that's something Piketty and others should be happy to see.
ReplyDeleteI don't think this study's projected decline in income inequality has totally accounted for the occurrence of the global financial crisis. Many people in the 1% took large yearly income cuts during the crisis. This shock may have showed that income inequality was improving when in reality we could be seeing a totally different conclusion. If this study looked at wealth inequality instead of income inequality, I think we would see a very different picture that doesn't portray such exciting improvement.
ReplyDeleteWell at first glance, this seems to be great news! To see fewer people "bunched at extreme levels of poverty" seems to point to at least some progress, no matter how small that progress may be. However, this increase in global income could also mean that the rich are simply getting richer, pulling the increase in global income with them, as opposed to more people at the other end of the spectrum increasing their wages. But, if these economists prediction's are true, and if Sub-Saharan Africa does in fact grow according to projections, and as many people can be pulled out of poverty as they predict, then we're on a great track! How the Sub-Saharan economies are going to grow will be very interesting, I think.
ReplyDeleteI agree that this reports don't necessarily mean Piketty is inaccurate. I think by now I have come clear to see that his data is some of the most accurate out there. Like Shelby said, there are so many ways to bias this type of data and skew or interpret it to represent different sides of the political spectrum. Combining that with what Aleks said, this probably means that the rich are just getting richer. If this report is true, then I would guess that would mean we are on a positive track. Piketty would, in my opinion, support true data that alluded to positive growth in developing countries.
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