This is one of the curves that has been the most commented on in recent years: the “elephant” drawn, not by the little prince, but by economics professors Branko Milanovic and his colleague Christopher Lakner. The curve summarizes what happened between 1988 and 2008 in the global economy: rising incomes in China, declining poverty in the South, explosive enrichment of the wealthiest in the North (the top 1%) and stagnation of lower middle classes in industrialized countries.
Branko Milanovic has just redone the same exercise, but on the 2008-2018 data. The curve that appears (in red) no longer resembles an elephant at all (in blue). It is much less spectacular, and yet, writes its author, it probably describes “the most significant redesign since the industrial revolution”.
First of all, let’s recall the principle of the curve.
- On the abscissa (horizontal scale), you have the distribution of earthlings according to their income. On the left, the poorest, on the right, the richest. Thus, between 95 and 100, they are the richest 5%.
- On the ordinate (vertical scale), the increase in income between 1988 and 2008. For example, excluding inflation, median incomes (in the center) have increased by 80%.
The interpretation of the “elephant”
What did the first graph tell us?
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