Irving B. Kravis

Changes in the world income distribution

Abstract Drawing on new international comparison estimates for 127 nations, this study examines in some detail for the decinnial years 1950–1980 the world size distribution of income. Different income concepts—national output valued in different ways, and also consumption alone; and income per-equivalent adult as well as per capita—have been considered in judging how world inequality has changed. The principal findings are: (i) at a point in time, the intercountry differences in income—differences among nations—are greater than the usually observed intracountry differences in income—differences within nations; and (ii) over time systematic differences in national economic growth rates of countries led on balance to very slightly increased intercountry inequality (quite possible not beyond the margin of measurement error) but that (and this judgment is quite tentative) the changes in intracountry inequality over time have left inequality in the overall distribution unchanged.

An approximation of the relative real per capita GDP of the People's Republic of China☆

Abstract This paper presents a rough estimate of the real per capita GDP of the Peoples Republic of China, relative to that of the U. S. and other countries, with a 1975 reference date.

Prices, Activity, and Machinery Exports: An Analysis Based on New Price Data

New data for the export prices of the United States, Germany, and Japan produced price elasticities for exports of machinery and transport equipment that were highest for the United States and lowest (well below 1) for Germany. The effects of price changes on exports lasted at least two years in all three countries and possibly four years in the United States. Only in Germany would most effects of price changes take place in the year of the change. U.S. export income in foreign currency would not exceed its pre-depreciation level until the third year after a depreciation.

Inequality among Nations: 1950 and 1975

Differential growth rates of both national product and population among countries lead over time to changing patterns of relative affluence and poverty. In this chapter the consequences of these differential growth rates are investigated by examining their implications for the world distribution of income over the period from 1950 to 1975. The results reported here are preliminary to a more comprehensive effort in progress which takes account of intra-country as well as inter-country income inequality.

A World of Unequal Incomes

Income inequality is usually greater in poor countries than in rich countries. Among rich countries, in comes tend to be more equally distributed in those countries which have relatively homogeneous populations, for example, in Denmark. Socialist countries have more equality in income distribution than other countries. These facts suggest that, among nonsocialist countries, incomes should become more equal as the level of income rises. Generally, this has indeed been the historical experience of the advanced industrial coun tries in the last century or so. However, it is possible that income distribution became less equal at an earlier stage of development. This hypothesis of inequality widening and then narrowing as per capita incomes rise is supported by current comparisons of inequality in different countries. This would be consistent with a tendency for income inequality to increase over time in a number of todays less developed coun tries (LDCs). It is possible, particularly where the rate of growth in per capita gross national product ( GNP ) is not rapid, that the real as well as the relative income of the lower income groups may decline. The degree of inequality in the world as a whole seems to be greater than that found within most countries. There does not appear to have been very much change in the degree of world income inequality in the last quarter century.

The Growth Criterion as a Guide for Reciprocal Trade Policy

I. Objectives of the United States reciprocal trade program, 273. — II. A program based on tariff quotas and the growth criterion, 276. — III. Advantages and problems of a policy based on tariff quotas and the growth criterion, 281.

The Systematic Behavior of Service Prices and Productivity in Different Countries

This chapter is an effort to explain an important feature of the comparative price structure of different countries—viz., the tendency for the prices of final product services to be more inexpensive in low income countries than are final product commodities.1

STAFFAN BURENSTAM LINDER. An Essay on Trade and Transformation. Pp. 167. New York: John Wiley & Sons, 1961.

But the author of the present book faced a more formidable task. The official Soviet indices of machinery production are, rightly, thought to be exaggerated. Such price indices as are sometimes published in the Soviet Union are consistent with the official output series and so cannot be used either. By a painstaking and ingenious pursuit of often elusive price and output data for as many kinds of machinery as possible, Moorsteen manages to construct price and output indices which can be compared with the official version and also with some other western recomputations. Following a sound tradition, he includes long appendices which present statistics and methods to the reader in full detail. The result is a valuable addition to our knowl-

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tribute. It is encouraging to learn that the Income and Wealth Conference has authorized another conference in this area, to be held in September 1962, which promises not only to extend the statistics in the direction of income and product estimates but also to push the history in the direction of some examination of the changes in techniques, economic organization, and demand patterns which underlay this economic movement. RICHARD RUGGLES

J. FREDERIC DEWHURST, JOHN O. COPPOCK, P. LAMARTINE YATES, and ASSOCIATES. Europe's Needs and Resources: Trends and Prospects in Eighteen Countries. Pp. xxvi, 1198. New York: Twentieth I Century Fund, 1961.

or foreign investment policy (for example, role of foreign capital in the economic development, problems of increasing private and public foreign investment). The author, formerly Assistant Secretary of State for Economic Affairs, and now an economics professor at Amherst College, has not tried to present a consensus of opinion or even to summarize the areas of agreement or disagreement. He has instead attempted to outline the problems that