International inequality
Posted on:1/28/2006
| Economic differences between rich and poor countries are considerable. |
Economic differences between rich and poor countries are considerable. According to the United Nations Human Development Report 2004, the GDP per capita in countries with high, medium and low human development (a classification based on the UN Human Development Index) was 24,806, 4,269 and 1,184 PPP$, respectively (PPP$ = purchasing power parity measured in United States dollars).
Economic inequality is generally considered to be approximately exponential as one traverses the strata of national and world societies from top-to-bottom. More sophisticated models of income distribution may apply (see Pareto distribution).
The evolution of the income gap between poor and rich countries is related to convergence. Convergence can be defined as "the tendency for poorer countries to grow faster than richer ones and, hence, for their levels of income to converge". Convergence is a matter of current research and debate, but most studies have shown lack of evidence for absolute convergence based on comparisons among countries (with regard to this debate see for instance Cole and Newmayer (2003)
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