2.4 — Development and inequality

• Know the main ways economists measure inequality (Gini) and development (HDI).

• Understand that growth and inequality are two different things.

• Be able to describe the main debates about how development happens. Measuring inequality. The most common measure of inequality within a country is the Gini coefficient. It's a number between 0 and 1 (or sometimes 0 and 100). A Gini of 0 means perfect equality — everyone has the same income. A Gini of 1 means perfect inequality — one person has all the income. In practice, countries range from about 0.25 (Scandinavia, generally more equal) to about 0.60 (some of the most unequal countries, mostly in Latin America and southern Africa). Inequality is different from poverty. A country can be rich on average but have high inequality (like the US).