Revisiting global income convergence: 1990-2018 A disaggregated analysis

A comprehensive global convergence of income based on β, σ, inequality (distribution sensitive) and club convergence (based on Markov process) across 187 countries over a period from 1990 to 2018 is studied here at the disaggregate level. We classify 187 countries into 5 geographical regions following United Nations Regional Groups. The β convergence is ensured globally as well as regionally but not σ convergence. Inequality based convergence highlights that global income inequality reduces after 2000; within(region) inequality is found higher than between (region) in lower and upper tail of the income distribution but middle of the distribution provides an opposite results. The club convergence of relative income clearly proves the existence of ‘low level income trap' since majority of the countries are clustered around low and lower-middle income classes over time (viz. 1990-2018). This low level income trap is more pronounced in African and Asia-Pacific regions that pose a serious threat towards attaining inclusive growth globally.