Trends in Intercountry Income Differences: World Levels and Decomposition Between and Within Regions

This paper analyzes the issue of per capita income convergence and world level of intercountiy income inequality within a geographical context. The evolution of the world level of intercountiy income inequality and its decomposition between and within geographical clusters and regions between 1960 and 1990 are analysed by applying the income-weighted entropy measure into a dataset of national-output estimates adjusted for purchasing power parity. The computation reveals that, in general, the period can be divided into three distinct phases of strong divergence (1960-1968), slow convergence (1969-1983) and stagnation (1984- 1990).