The synchronization club: classification of global economic groups by inequality |
| |
Authors: | Hongduo Cao Yong Tan |
| |
Institution: | 1. Business School, Sun Yat-Sen University, Guangzhou 510275, China;2. Michael G. Foster of Business, University of Washington, Seattle, WA 98195-3226, USA |
| |
Abstract: | We find that, from 1970 to 2006, the GDPs of 181 countries are described by a log-normal with a power law tail before 1992, but by a kinked power law distribution after 1992. In the 15 years from 1992 to 2006, there are two obvious scale-free zones for annual GDPs, ranked from the largest to smallest. If the countries in each scaling region are regarded as a group, the world is divided into two groups, each with a roughly stable number of members. The power exponents of the two groups are different and hence lead to different inequalities. Therefore, the basis for classification is the macro-consistent inequality within each group. The wealth grows in a synchronous nonlinear manner within groups that have a stable wealth distribution and rank structure. If each group is considered as a club, we name it a ‘synchronization club’. |
| |
Keywords: | GDP inequality log-normal power law ‘synchronization club’ |
|
|