Income Inequality Matters: How to Ensure Economic Growth Benefits the Many and Not the Few
IMF SEMINAR EVENT
DATE: April 13, 2019
DAY: Saturday
01:30 PM - 02:00 PM
LOCATION: IMF HQ1 Meetings Hall A B
Overview
Achieving inclusive growth is one of the critical challenges of our time. Inequality has increased since the late 1980s in most advanced economies and remains high in most emerging markets and developing economies, despite the progress made in many of these countries. How can economic policies be designed to tackle inequality while avoiding or mitigating possible negative repercussions for efficiency and growth? How to foster inclusive growth?
Join the conversation via #InequalityMatters
Income Inequality Matters: How to Ensure Economic Growth Benefits the Many and Not the Few
SUMMARY
-
Aspects of inequality.
Goldberg
noted that inequality in advanced countries has been a major issue over
recent years, contributing to a loss of trust in institutions and
democracy, and a sense that the elite have captured all the gains at
the expense of the rest. She added that technology and globalization
have created disruptions which we have not dealt with very well. Boone highlighted that the critical issue is not just
inequality of income, but also inequality of opportunity and the fact
that inequality is reproducing itself. She noted that as the middle
class hollows out, social tensions increase.
- Polices to address inequality. Gopinath and the speakers agreed that addressing rising (domestic) inequality was a matter of urgency. Goldberg underscored that we need to think more proactively about redistribution policies. One important aspect of inequality, especially in the US, is that real wages have stagnated. Policy options include redistributive taxation, minimum wages (although often controversial), and direct labor market policies. There is also a geographical aspect to inequality, and Goldberg argued there is a need for policies that foster regional mobility. Boone suggested that digitalization could help solve this problem as people can remain local and work remotely. She also argued that there is scope to improve international taxation to ensure a level playing field and prevent corporations from “fishing for arbitrage” and encourage them to pay their fair share of taxes where they create value and employ people.
