Relationships between growth absolute and relative income

This study examines the relationship between absolute and relative real income of people and how these relationships are related to aggregate measures of per capita income and growth. The focus is on outcomes of the poor. The poor are defined per country as the lowest 20 percent of the population, in terms of income. We analyze the relationships between real per capita income and growth (which we call group A variables) and the following 2 variables: relative income or indicators (Gini coefficients, percentile shares of income, which we refer to as the group B1 variables); and absolute per capita income measurements of poor segments of the population (group B2 variables).; The motivation for studying these relationships arises from controversies as to (1) whether high income or growth is associated with high or rising inequality in income; and (2) whether, for this or other reasons, higher inequality tends to be associated with lower standards of living for poor people. To take one possible outcome of the second controversy, if higher growth and inequality are associated with rising absolute standards of living of poor people, it would be more difficult to argue that higher growth and inequality worsens outcomes for the poor.; The analysis relies mainly on cross-sectional data using correlations and simple OLS methodology. Panel analysis is not attempted because of the lack of time-series data across countries. The cross sectional data used is further disaggregated into regions. One example of which would be countries with high versus low levels of aggregate per capita income and high versus low levels of inequality. Results of the analysis are presented in tables where the relationship between group A and B variables are presented by slope coefficients, t-statistics and R squared.