Inequality from a global perspective

Working Paper 2013-302


The interplay of between- and within-country inequality, the relative contribution of each to overall global inequality, and the implications this has for who benefits from recent global growth (and by how much), has become a significant avenue for economic research. Drawing conclusions from aggregate inequality indices such as the Gini and Theil reduces the highly complex nature of global inequality to a single coefficient and makes it impossible to take a nuanced view of how global growth interacts with changing national and international inequality. In light of this we propose and justify an alternative approach based on four consumption `layers’ identified by reference to the global consumption distribution. We consider how each `layer’ of global society has fared since the end of the Cold War.

Authors: Peter Edward, Andy Sumner.

Keywords: Poverty, inequality, economic development.
JEL: D63, I32.