The State of the World ( Poverty and Inequality)

1. The State of the World(Poverty and Inequality) Xavier Sala-i-Martin Columbia University June 2013

2. Goal • Estimate WDI consistent with the empirical growth evidence (which uses GDP per capita as the mean of each country/year distribution). • Estimate Poverty Rates and Counts resulting from this distribution • Estimate Income Inequality across the world’s citizens

3. Data • Note: All income data are PPP-Adjusted • Note: When we talk about GDP per capita (business cycles, trade, international economics, growth,…) we usually think of it as the as the “average” or “mean” of each country/year distribution of income

4. China and India • I decompose China and India into Rural and Urban • Use local surveys to get relative incomes of rural and urban • Apply the ratio to PWT GDP and estimate per capita income in Rural and Urban and treat them as separate data points (as if they were different “countries”)

5. GDP Per Capita Since 1970

6. Merge with Survey Data • But NA Numbers do not show Personal Situation: Need Individual Income Distribution • We can use Survey Data

7. Results

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