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Global growth and distribution : are China and India reshaping the world?

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  • Bussolo, Maurizio
  • De Hoyos, Rafael E.
  • Medvedev, Denis
  • van der Mensbrugghe, Dominique

Abstract

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 growthis 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.

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  • Bussolo, Maurizio & De Hoyos, Rafael E. & Medvedev, Denis & van der Mensbrugghe, Dominique, 2007. "Global growth and distribution : are China and India reshaping the world?," Policy Research Working Paper Series 4392, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4392
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    3. Clovis Freire & Alberto Isgut, 2011. "High Food and Oil Prices and Their Impact on the Achievement of MDG 1 in Asia and the Pacific," MPDD Working Paper Series WP/11/18, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    4. van der Mensbrugghe, Dominique & Osorio Rodarte, Israel & Burns, Andrew & Baffes, John, 2009. "How to feed the world in 2050: Macroeconomic environment, commodity markets - A longer temr outlook," MPRA Paper 19019, University Library of Munich, Germany.
    5. Serguei MIKHAILITCHENKO, 2017. "Economic structure of educational process and its implications for the higher education reform," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 69-82, Spring.
    6. Cockburn, John & Duclos, Jean-Yves & Zabsonré, Agnès, 2014. "Is global social welfare increasing? A critical-level enquiry," Journal of Public Economics, Elsevier, vol. 118(C), pages 151-162.
    7. Unathi Sonwabile Henama, 2013. "Attracting Indian Outbound Tourists to South Africa: A BRICS Perspective," India Quarterly: A Journal of International Affairs, , vol. 69(3), pages 229-247, September.
    8. Chun, Natalie & Hasan, Rana & Rahman, Muhammad Habibur & Ulubaşoğlu, Mehmet A., 2016. "The role of middle class in democratic diffusion," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 536-548.
    9. Bussolo, Maurizio & De Hoyos, Rafael & Medvedev, Denis, 2008. "Global Income Distribution and Poverty in the Absence of Agricultural Distortions," Conference papers 331764, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Weaver, David B., 2012. "Organic, incremental and induced paths to sustainable mass tourism convergence," Tourism Management, Elsevier, vol. 33(5), pages 1030-1037.
    11. Lyubimov, Ivan (Любимов, Иван), 2016. "A look at the evolution of income inequality: Piketty against Blacksmith - 60 years later [Взгляд На Эволюцию Неравенства Доходов: Пикетти Против Кузнеца — 60 Лет Спустя]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 27-42, February.
    12. Boureima Sawadogo & Tegawende Juliette Nana & Maimouna Hama Natama & Fidèle Bama & Emma Tapsoba & Kassoum Zerbo, 2015. "Impact de l'expansion économique et commerciale de la Chine sur la croissance et l'emploi au Burkina Faso: une analyse en équilibre général calculable," Working Papers MPIA 2015-03, PEP-MPIA.
    13. Jing Wang & Dana Medianu & John Whalley, 2011. "The Contribution of China, India and Brazil to Narrowing North-South Differences in GDP/capita, World Trade Shares, and Market Capitalization," NBER Working Papers 17681, National Bureau of Economic Research, Inc.
    14. Lyubimov, Ivan, 2017. "Income inequality revisited 60 years later: Piketty vs Kuznets," Russian Journal of Economics, Elsevier, vol. 3(1), pages 42-53.
    15. Serguei MIKHAILITCHENKO, 2017. "Economic structure of educational process and its implications for the higher education reform," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(610), S), pages 69-82, Spring.

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    Keywords

    Inequality; Economic Theory&Research; Emerging Markets; Achieving Shared Growth;
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