Bluematter.

If present trends continue, the poverty Millennium Development Goal of halving the proportion of people with incomes less than one dollar a day will be achieved on time.

And there's more, from a new NBER paper by Sala-i-Martin and Pinkovskiy entitled AFRICAN POVERTY IS FALLING...MUCH FASTER THAN YOU THINK!(I covered their previous related paper here):

1) African poverty is falling and is falling rapidly; (2) if present trends continue, the poverty Millennium Development Goal of halving the proportion of people with incomes less than one dollar a day will be achieved on time; (3) the growth spurt that began in 1995 decreased African income inequality instead of increasing it; (4) African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic.

And there's some lovely graphs too - the style is unappealing, but the content is so sweet it's worth framing them and hanging them on every wall you can find:


And here's where I'll be going in a month's time:


Yes, there is such thing as an uplifting economic paper.

Maxim Pinkovskiy and Xavier Sala-i-Martin have an important new NBER paper out parametrically estimating the world distribution of income. Some highlights on poverty:

• Defining poverty as less than $1/day, world poverty rates fell by 80% from 27% in 1970 to slightly more than 5% in 2006.
  
• The corresponding total number of poor fell from 403 million in 1970 to 152 million in 2006.
• Similar findings apply if other poverty measures are used ($2/day, 5$/day, etc)
  
• These estimates are much lower than what is suggested in other research.

The paper is an obvious must-read. I haven't yet had more than a quick look at the methodology, but it all looks decent enough for this sort of thing and even impressive at parts, and of course Sala-i-Martin's name is a gold seal of quality.

One of my parents' good friends is a very successful (and rich) lawyer in her late fifties who grew up near Nafpaktos in western mainland Greece.

Back in the 60's when she was graduating from primary school, pupils needed to pass a challenging set of exams if they were to proceed to high school. Aleka almost didn't make it, and the reason was this: her father was dead worried that, if she failed the exams, the family wouldn't have any use for a girl's pair of shoes - and he refused to make the investment up to a few days before the exams. Aleka had no shoes up till then, and shoes were necessary to be allowed in the exam hall.

Going further back to the 1930's, my grandfather also passed his high-school exams, one of only two people in his entire (very large) village to achieve the feat that year. To get to the school, he had to walk 40 kms (a full marathon) every Sunday to get to the city, and 40 kms every Saturday to get back to his village. My great-grandfather made sure shoes were provided, but there was never any thought of my grandfather wearing them during his twice-weekly marathon: that would wear them out, and with no shoes there would be no school.

Fast-forward to the present, and I'm tutoring 15-year olds in economics. The subject turns to economic growth (shockingly, not part of the syllabus), and I ask them whether they think people today are better off in material terms than they were 40 or 60 years ago. They usually hesitate to answer economics questions, and they often disagree with each other. This time, there was no need to pause for thought: they all confidently told me that people today are much, much poorer.