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Global inequality recalculated: The effect of new 2005 PPP estimates on global inequality

Milanovic, Branko (2009): Global inequality recalculated: The effect of new 2005 PPP estimates on global inequality.

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Abstract

The results of new direct price level comparisons across 146 countries in 2005 have led to large revisions of PPP (purchasing power parity) exchanges rates, particularly for China and India. The recalculation of international and global inequalities, using the new PPPs, shows that inequalities are substantially higher than previously thought. Inequality between global citizens is estimated at 70 Gini points rather than 65 as before. The richest decile receives 57 percent of global income rather than 50 percent.

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