Glimpses of the Literature on International Inequality and Catch-Up

Abstract

The objective of this chapter is to review the literature on trend in International Inequality in Per Capita Incomes in recent decades. The chapter first reviews the International Comparison Program (ICP) and Penn World Tables (PWTs) with special reference to ICP 2011 and the next-generation PWT. The evidence from the reviewed studies for the period 1960–2011 varies with the group of countries considered: convergence among OECD countries and lack of convergence worldwide. The chapter draws heavily upon Deepak Nayyar’s analysis of catch-up achieved by developing countries in the world economy during 1950–2010. Several other recent studies have also been reviewed. One major finding is that international inequality has been on the decline, although intranational inequality has been on the rise. In the New World Order, highlighted recently by Jorgenson, the ranking of the seven largest economies in terms of size of the economy is China, the USA, India, Japan, Germany, Russia and Brazil. However, India’s per capita income is the lowest among these countries.

This paper originated when the author made short visits to the Centre for Multi-Disciplinary Research (CMDR), Dharwar, Karnataka State, during 2013–2015, under the Dr. G. M. Namjundappa, Chair. The author thanks the participants at his seminar talk in CMDR in June 2014, for their comments. He expresses his gratitude to Prof. P. R. Panchamukhi, Chairman, CMDR, Prof. Pushpa Trivedi, Director in 2014, Prof. Vinod Annigeri, Current Director CMDR and Prof. Gopal Kadekodti, Honorary Professor, CMDR. The author thanks Ms. C. Kalai Selvi of MIDS and Mr. Rajesh Papnai of CDE, DSE and Mr. Jaya Thirth of CMDR for type setting the manuscript.