Inclusive Growth: Measurement and Determinants

By Rahul Anand, Saurabh Mishra, Shanaka J Peiris

May 30, 2013

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Rahul Anand, Saurabh Mishra, and Shanaka J Peiris. Inclusive Growth: Measurement and Determinants, (USA: International Monetary Fund, 2013) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We estimate a unified measure of inclusive growth for emerging markets by integrating their economic growth performance and income distribution outcomes, using data over three decades. Country distributions are calibrated by combining PPP GDP per capita and income distribution from survey data. We apply the microeconomic concept of a social mobility function at the macroeconomic level to measure inclusive growth that is closer to the absolute definition of pro-poor growth. This dynamic measure permits us to focus on inequality as well as distinguish between countries where per capita income growth was the same for the top and the bottom of the income pyramid, by accounting for the pace of growth. Our results indicate that macroeconomic stability, human capital, and structural changes are foundations for achieving inclusive growth. The role of globalization could also be positive with foreign direct investment and trade openess fostering greater inclusiveness, while financial deepening and technological change have no discernible effect.

Subject: Economic growth, Financial institutions, Inclusive growth, Income distribution, Income inequality, National accounts, Personal income, Stocks

Keywords: Distribution, Distribution outcome, Economic growth, Equity, Equity index of income, Global, Inclusive growth, Income, Income contraction, Income distribution, Income growth, Income inequality, Inequality, Low income country, Middle East and Central Asia, Personal income, Pro-poor growth, Stocks, Value chain, Western Hemisphere, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/135
Stock No:

WPIEA2013135
ISBN:

9781484323212
ISSN:

1018-5941

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