2004/18 LEM Working Paper Series

Income Levels and Income Growth.
Some New Cross-Country Evidence and Some Interpretative Puzzles

Carolina Castaldi, Giovanni Dosi
International Distribution of Incomes, International Growth Rates, Scaling Laws, Growth Volatility, Exponential Tails

  JEL Classifications
C10, C14, O11

This work brings together two distinct ensembles of evidence concerning, at macro level, international distributions of incomes and their dynamics, and, at micro level, the size distributions of firms and the properties of their growth rates. Together, we also consider an intermediate level of observation, namely the properties of sectoral growth. First, our empirical analysis provides a fresh look at the international distri-butions of incomes and growth rates by investigating more closely the relationship between the two entities and the statistical properties of the growth process. Second, we try to identify those statistical properties which are invariant with respect to the scale of observation (country, sector or firm) as distinct from those that are instead scale specific. This exercise puts forward a few major interpretative challenges regarding the correlating processes underlying the statistical evidence.

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