Econintersect: Branko Milanovic, City University of New York, and author of the book The Haves and the Have-Nots containing essays about global inequality. This documentary is a September 2014 lecture presented at the Stockholm Institute of Transition Economics. Global inequality in recent decades has been dominated by changes in China, India, the U.S. and Indonesia, with China and India, particularly, reducing the global GDP while some within-country inequality has been increasing.
It is remarkable that dramatically increasing inequality within China has been a driver for the reduction of inequality across the world. This has happened because of the concomitant lack of middle income growth in the “rich” part of the world, especially in the U.S.
Econintersect: Perhaps an oversimplification, this story represents a transfer of income growth from the middle classes of the developed world to the formerly poor (and still relatively poorer) middle classes of Asia.
Milanovic suggests that China may soon start to experience some of the “hollowing out” of its middle class as Chinese middle class incomes converge with those in the developed world while income growth in India, Indonesia and Nigeria (and smaller developing economies) continues.