Factor-Price Equalization, Illustrated

Timothy Taylor writes,

It used to be said back in the 1960s that the global distribution of income was bi-modal–that is, it had one hump representing the large number of people who were very low-income and then a smaller hump representing those in the high-income countries…But over time, the highest point in the income distribution is shifting to the right, and by 2008, the world has moved fairly close to having a unimodal or one-hump distribution of income.

Read the whole post, which discusses a paper by Christoph Lakner and Branko Milanovic. Globalization, and in particular the growth of China, has flattened out the rich-country “hump,” leaving only the global hump. Average is over for the rich countries, in part because average has started for China.

1 thought on “Factor-Price Equalization, Illustrated

  1. If we tend toward a single hump, rising from each side then we are equilibratiors, a hard point to refute.

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