English Dictionary Defines Talent As a “Power Or Ability of Mind Or Body Viewed As Something Divinely Entrusted to a Person for Use and Improvement”
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AUTHOR ACCEPTED MANUSCRIPT FINAL PUBLICATION INFORMATION Inequality and Growth Patterns and Policy, Volume 1. Concepts and Analysis The definitive version of the text was subsequently published in Inequality and Growth : Patterns and Policy, Volume 1. Concepts and Analysis, New York: Palgrave Macmillan, , 2016 Published by Palgrave Macmillan and found at http://dx.doi.org/10.1596/978-1-137-55453-6 THE FINAL PUBLISHED VERSION OF THIS MANUSCRIPT IS AVAILABLE ON THE PUBLISHER’S PLATFORM This Author Accepted Manuscript is copyrighted by World Bank, Joseph Stiglitz, and the International Economic Association and published by Palgrave Macmillan. It is posted here by agreement between them. Changes resulting from the publishing process—such as editing, corrections, structural formatting, and other quality control mechanisms —may not be reflected in this version of the text. You may download, copy, and distribute this Author Accepted Manuscript for noncommercial purposes. Your license is limited by the following restrictions: (1) You may use this Author Accepted Manuscript for noncommercial purposes only under a CC BY-NC-ND 3.0 IGO license http://creativecommons.org/licenses/by-nc-nd/3.0/igo/. (2) The integrity of the work and identification of the author, copyright owner, and publisher must be preserved in any copy. (3) You must attribute this Author Accepted Manuscript in the following format: This is an Author Accepted Manuscript by Basu, Kaushik; Stiglitz, Joseph E. Inequality and Growth © World Bank, Joseph Stiglitz, and the International Economic Association, published in the Inequality and Growth : Patterns and Policy, Volume 1. Concepts and Analysis, New York: Palgrave Macmillan 2016 CC BY-NC-ND 3.0 IGO http:// creativecommons.org/licenses/by-nc-nd/3.0/igo/ http://dx.doi.org/10.1596/978-1-137-55453-6 © 2021 World Bank, Joseph Stiglitz, and the International Economic Association Inequality and Growth: Patterns and Policy Volume I: Concepts and Analysis Edited by Kaushik Basu And Joseph E. Stiglitz IEA Conference Volume No. 156-I Inequality and Growth: Patterns and Policy Volume 1: Concepts and Analysis Table of contents List of figures and tables Notes on the contributors Introduction Inequality and Growth: A Preamble Kaushik Basu, Joseph E. Stiglitz and Vivian Hon 1. New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals Joseph E. Stiglitz 2. Reflections on the ‘Equity and Development’ World Development Report Ten Years Later Francois Bourguignon Equity and Development: Revisiting the 2006 World Development Report Martin Ravallion 3. Person Equivalent Headcount Measures of Poverty Tony Castleman, James E. Foster and Stephen C. Smith Comments on ‘Person Equivalent Headcount Measures of Poverty’ Bhaskar Dutta 4. How Useful is Inequality of Opportunity as a Policy Construct? Ravi Kanbur and Adam Wagstaff Comments on ‘How Useful is Inequality of Opportunity as a Policy Construct?’ Aristomene Varoudakis 5. Towards a New Definition of Shared Prosperity: A Dynamic Perspective from Three Countries Hai-Anh H. Dang and Peter Lanjouw i Comments on ‘Welfare Dynamics Measurement: Two Definitions of a Vulnerability Line and their Applications’ Sudhir Anand 6. Behavioral Economics and Social Exclusion: Can Interventions Overcome Prejudice? Karla Hoff Origin and Evolution of Cognitive Frames: Comments on ‘Behavioral Economics and Social Exclusion: Can Interventions Overcome Prejudice?’ Paola Giuliano 7. The Effects of Fiscal Redistribution Michele Battisti and Joseph Zeira Comments on ‘The Effects of Fiscal Redistribution’ James E. Foster 8. Inequality of Happiness: Evidence of the Compression of the Subjective Well-being Distribution with Economic Growth John Ifcher and Homa Zarghamee Why focus on Subjective Well-Being inequality?: Comments on ‘Inequality of Happiness: Evidence of the Compression of the Subjective Well-being Distribution with Economic Growth’ Murray Leibbrandt ii Inequality and Growth: Patterns and Policy Volume 1: Concepts and Analysis List of Figures Figure1.1 GDP and Inputs in France Figure 1.2 Multiple Equilibria in Pure Life Cycle Mode Figure 1.3 Steady States and dynamics with Non Productive Land: linear savings Figure 1.4a Unstable Dynamics with Non Productive Land and non-linear savings function Figure 1.4b Oscillatory Dynamics with Non Productive Land and non-linear savings function Figure 1.5 Steady State and unstable dynamics with Land Augmenting Technical Change Figure 1.6a Effect of increase in tax on returns to land Figure 1.6b Effect of tax on capital gains Figure 2.1 Wealth transfer and efficiency Figure 6.1 Interventions to change mental models that influence behavior Figure 6.2 The fraction of women elected in free elections Figure 6.3 Excess fees charged to students Figure 6.4 Scholarships paid to SC students Figure 6.5 Teacher effort in non-elite areas Figure 6.6 The performance of high- and low-caste boys in India Figure 6.7 The performance of boys and girls with non-migrant and migrant status in Beijing Figure 7.1: Gini of Disposable Income and Percent of Public Expenditures in GDP across 83 Countries in 2005 Figure 8.1a Distribution of LS responses in WVS (341,198 observations) Figure 8.1b Distribution of standard deviation of LS by country-wave pair (237 observations) iii Figure 8.2a Scatterplot of standard deviation of life satisfaction and natural log of per capita GDP (in 2000usd) Figure 8.2b Scatterplot of standard deviation of life satisfaction and gross domestic product per capita (in 2000usd) Figure 8.3 Time-series of U.S. standard deviation of life satisfaction and the natural log of per-capita GDP, 1982-2006 Figure 8.4 Scatterplot of average annual percent change in standard deviation of life satisfaction and average annual percent change in per capita GDP for countries in 5 waves of WVS Figure 8.5 Scatterplot of average annual percent change in standard deviation of life satisfaction and average annual percent change in per capita GDP for countries in at least 4 waves of WVS List of Tables Table 3.1: Person Equivalent Headcount Measures: Full Sample (1990s Global Benchmark) Table 3.2: Person Equivalent Headcount Measures by Region (1990s Global Benchmark) Table 3.3: Person Equivalent Headcount Measures for Selected Countries (1990s Global Benchmark) Table 3.4: Countries with Negative Depth Elasticities (1990s Global Benchmark) Table 3.5: Countries in Sub-Saharan Africa (2000s Regional Benchmark) Table 3.6: Person Equivalent Headcount Measures in Niger (1994 Country Benchmark) Table 5.1: Growth Experience of India, the United States, and Vietnam (percentage) Table 5.2: Typology of Welfare Transition Dynamics over Two Periods Table 5.3: Welfare Transition Dynamics of India, the United States, and Vietnam (percentage) Table 5 Appendix 1.1: Vulnerability Lines at Given Vulnerability Indexes for India, 2004-2009 Table 5 Appendix 1.2: Welfare Transition Dynamics of India, the United States, and Vietnam, Absolute Changes (percentage) Table 7.1 Gini of Disposable Incomes and Public Expenditures across Countries, 2005 Table 7.2 Pooled and Panel Regressions of Gini over Public Expenditures iv Table 7.3 2SLS Regression of Gini over Public Expenditures Table 7.4 Cross-Section Tests of the Rate of Poverty on Fiscal Policy in OECD Countries Table 7.5 Pooled Regressions of the Rate of Poverty on Fiscal Policy in OECD Countries Table 8.1 Countries in WVS sorted by the standard deviation of life satisfaction (n = 97) Table 8.2 Mean characteristics by country-wave pairs Table 8.3 Ordinary least square estimates of equation (1) where the dependent variable is the standard deviation of life satisfaction Table 8.4 Ordinary least square estimates of equation (1) where the dependent variable is the standard deviation of life satisfaction Table 8.5 Ordinary least square estimates of equation (1) where the dependent variable is the standard deviation of life satisfaction, using WDI data and comparing the standard deviation of reported income to the Gini coefficient Table 8.6 Ordinary least square estimates of equation (1) where the dependent variable is low and high levels of life satisfaction Table 8.7 Ordinary least square estimates of equation (1) where the dependent variable is the standard deviation of life satisfaction and sample is limited to OECD countries and also countries with high GDP per capita Table 8.8 Ordinary least squares estimates of regressing the average annual change in the standard deviation of life satisfaction on average annual per capita GDP growth v Notes on the Contributors Editors Kaushik Basu is the Chief Economist and Senior Vice President of the World Bank. Prior to joining the World Bank, he served as Chief Economic Adviser to the Government of India and is currently on leave from Cornell where he is Professor of Economics and the C. Marks Professor of International Studies. Mr. Basu holds a PhD in Economics from the London School of Economics, and is a recipient of one of India’s highest civilian honors, the Padma Bhushan. His contributions span development economics, welfare economics, industrial organization and game theory. He has taught at the Delhi School of Economics, Harvard, Princeton and MIT. His most recent book is An Economist in the Real World: The Art of Policymaking in India (MIT Press). Joseph E. Stiglitz is University Professor at Columbia University, the winner of the 2001 Nobel Memorial Prize in Economics, and a lead author of the 1995 IPCC report, which shared the 2007 Nobel Peace Prize. He was chairman of the U.S. Council of Economic Advisors under President Clinton and chief economist and senior vice president of the World Bank for 1997-2000. Stiglitz received the John Bates Clark Medal, awarded annually to the American economist under 40 who has made the most significant contribution to the subject. He was a Fulbright Scholar at Cambridge University, held the Drummond Professorship at All Souls College Oxford, and has also taught at M.I.T, Yale, Stanford, and Princeton.