J. E. RIGGS ET AL.

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in Equation (7) will dominate the linearly increasing nu-

merator, and the coefficient of variation, or income inequal-

ity, must eventually decrease [9]. It was also emphasized

that this mathematical explanation for the global Kuznets

curve was dependent not only on the initial conditions in

the data, but also the period of time over which the

analysis was conducted [9].

In the present analysis, the world’s nations and region

were stratified by mean per capita GDP to determine if

the subgroup SD also in cr eased lin ear ly and th e subgr oup

MEAN also increased exponentially. As Equations (2),

(4), and (6) and Figures 3, 6, and 9 demonstrate, there

was an exponential rate of increase in the mean per cap-

it a GD P in all three groups. Moreover, the exponential rate

of incr ease in the mean per capita GDP in the two richest

groups (TOP and MIDDLE) is about twice that of the

poorest group (BOTTOM); that is 1.8234 percent and

1.87266 pe rcent respectively compared to 3.62175 percent.

Thus, ultimately the BOTTOM group should demonstrate

more rapid decreasing income inequality than the TOP and

MIDDL E groups, which is what was observed. Thus, con-

trary to what Kuznets suggested, from a global perspec-

tive, the least economically developed nations/regions

experienced earlier and more rapid decreasing income

inequality.

Similar to what was observed when global economies

were not stratified [9], the SD of the population-weighted

per capita GDP increased reasonably linearly in the TOP

and MIDDLE groups as was demonstrated in Equations

(1) and (3) and Figures 2 and 5. In the BOTTOM group,

however, the SD of the population-weighted per capita

GDP showed a much more apparent rapid rate of increa se

beginning in the early 1990’s (Figure 8) which resulted

in some increasing income inequality in the BOTTOM

group after year 2000 (Figure 7).

These findings are consistent with the thesis that ulti-

mately globalization of the world’s economy will be as-

sociated with decreasing international income inequality

[10]. Moreover, th ese findings also suggest that although

much international income inequality exists, the world’s

poorest nations will likely demonstrate the greatest rela-

tive economic growth (Table 2), as long as those nations

maintain the political and economic stability required to

take advantage of the relative ease of international capital

and technology flows that are necessary to utilize and take

advantage of cheaper labor markets [11]. Despite its eco-

nomic implications, the ultimate relative decreasing inco me

equality of the world’s population will likely have signif i-

cant political implications and expectations with respect

to future world political and economic development [12].

Although a global Kuznets curve, with its distinctive

inverted U shape, was demonstrated for the global econ-

omy between 1969 and 2007 [9], the inverted U was not

demonstrated within the world’s TOP, MIDDLE, and

BOTTOM groups. Although Kuznets [1] hypo thesized t h at

national economic development was associated initially

with increasing income inequality followed by decreasing

income inequality, the two richest and most developed

economic groups in this study actually displayed only the

first half of the inverted U shape of a Kuznets curve. Dur -

ing the time period of this study, the most developed eco-

nomies (the TOP and MIDDLE groups) actually displayed

increasing income inequality, primarily reflecting their low

rate of exponential growth in their mean per capita GDP

(Figures 1 and 4). By comparison, the least developed eco-

nomies (the BOTTOM group) displayed decreasing in co me

inequality, primarily reflecting their much higher rate of

exponential growth in their mean per capita GDP (Figure

7). Consequently, Kuznets’ postulated relationship betw ee n

status of economic development and income inequality is

not applicable in national/regional economies stratified by

mean per capita income in the short-term. This conclu-

sion is based upon the ability of a globalized economy,

with accessible low-cost labor forces in poor countries, to

more relatively rapidly increase the mean income in poor

counties driving down their subgroup income inequality

despite their relative poorer state of overall economic de-

velopment. Nevertheless, in the long-term, Kuznets’ pre-

diction regarding decreasing income inequality, at least

from the between nation perspective in the global econ-

omy, is likely to prove accurate.

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