CIAO DATE: 05/2009
April 2006
Institute for Social and Economic Research and Policy at Columbia University
This paper examines the phenomenon of real-income stagnation (in which real-income growth is uninterruptedly negligible or negative for a sizable sequence of years). The authors analyze data for four decades from a large cross-section of countries. Real income stagnation is a conceptually distinct phenomenon from low average growth and other features of the growth sequence that have been previously considered. The authors find that real income stagnation has affected a significant number of countries (103 out of 168), and resulted in substantial income loss. Countries that suffered spells of real income stagnation were more likely to be poor, in Latin America or sub-Saharan Africa, conflict ridden and dependent on primary commodity exports. Stagnation is also very likely to persist over time. Countries that were afflicted with stagnation in the 1960s had a likelihood of seventy-five percent of also being afflicted with stagnation in the 1990s.
Resource link: Real Income Stagnation of Countries, 1960-2001 [PDF] - 308K