The Ricardian Vice: Why Sala-i-Martin’s calculations of world income inequality are wrong

Abstract

The paper discusses recent world income inequality calculations by Sala- i-Martin. It shows that the two main problems with which the author had to grapple (too few data to derive countries’ income distributions, and sparseness of such data in time) are not solved in a satisfactory fashion. They, and several other simplifying assumptions, make Sala-i- Martin results very dubious. We argue that Sala-i-Martin has ended up by producing a population-weighted inter-national distribution of income augmented by a constant shift parameter and not a distribution of income among world citizens.income inequality, world, globalization