published in:
Oxford Economic Papers, 2006, 58 (3), 531-548
We provide an analytical framework within which changes in income inequality over time are
related to the pattern of income growth across the income range, and the reshuffling of
individuals in the income pecking order. We use it to explain how it was possible both for “the
poor” to have fared badly relatively to “the rich” in the USA during the 1980s (when income
inequality grew substantially), and also for income growth to have been pro-poor. Income
growth was also pro-poor in Western Germany, more so than in the USA, and inequality did
not rise as much.
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