Milanovic - The Great Convergence

What is the main argument?

• while inequality is rising within many individual countries, the gap between the world’s richer and poorer people is shrinking

• 69.4 —> 60.1 Gini coefficient 

Why is the great convergence happening?

• rise of China (since so populous, this growth touched a huge number of people)

• led to a reshuffling of individual positions (median urban Chinese income moved from roughly from 45th income percentile to 70th)

What are the consequences of the great convergence?

• Westerners are falling behind (people in lower-income and middle-class groups of western countries are being overtaken in global income rankings by earners in Asia)

• the richest stay the same (top 5%) and are dominated by westerners

• causes domestic conflict in western societies as the poor slide down the global hierarchy

• china is too wealthy to continue driving global inequality down (future reductions in global inequality will depend on fast economic growth in populous African countries - trends say this is unlikely)

How much of the population was touched by China’s growth?

• 1/5th-1/4th