Permanent income, convergence and inequality among countries

• Autores: José Manuel Pastor Monsálvez, Lorenzo Serrano Martínez
• Localización: Notas técnicas: [continuación de Documentos de Trabajo FUNCAS], ISSN-e 1988-8767, Nº. 211, 2005
• Idioma: español
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• Resumen

  • The literature on the phenomenon of inequality has focussed on the analysis of the dispersion of indicators such as per capita annual income. This paper adopts a different approach, as it considers the life cycle dimension of inequality and convergence between economies from 1960 to 2000. On the basis of this approach various simulations are made, to determine the effect on convergence in permanent income of variables such as survival rates and the (non)existence of convergence in current income. The results indicate that although the main source of inequality in permanent income is inequality in current income, the survival rates are also important, especially when there is convergence in current income. Not to consider this source of inequality implies under-estimating the true level of inequality among economies.