IMF Fiscal Monitor: Tackling Inequality, October 2017
Fiscal Monitor, October 2017
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Bibliographic details
- Published: October 11, 2017
Key findings on inequality trends
- At the global level, inequality has declined substantially over the past three decades.
- Within national boundaries the picture is mixed: some countries have experienced a reduction in inequality while others, particularly advanced economies, have seen a significant increase.
- Rising inequality in some countries has contributed to growing public backlash against globalization.
- Excessive levels of inequality can erode social cohesion, lead to political polarization, and ultimately lower economic growth.
- Whether inequality is excessive depends on country-specific factors, including the growth context in which inequality arises, along with societal preferences.
Fiscal policy role and focus areas
- The Fiscal Monitor examines how fiscal policy can help governments address high levels of inequality while minimizing potential trade-offs between efficiency and equity.
- The report concentrates on three salient policy debates:
- Progressivity of tax rates at the top of the income distribution.
- The introduction of a universal basic income.
- The role of public spending on education and health to equalize opportunities and outcomes.
Analytical approach and tools
- The analysis relies on:
- Existing theoretical and empirical literature.
- IMF work on inequality and fiscal policy.
- Country experiences.
- New analytical work, including various static microsimulation analyses based on household survey data.
- Simulations using a dynamic general equilibrium model, calibrated to country-specific data and behavioral parameters, illustrate the potential impact of alternative budget-neutral tax and transfer measures on income inequality and economic growth.
Themes addressed in the report
- Documentation of recent trends in income inequality, including inequality both between and within countries.
- Examination of the redistributive role of fiscal policies over recent decades and emphasis on the importance of policy design to minimize efficiency costs.
- Focused analysis of key components of fiscal redistribution: progressivity of income taxation, universal basic income, and public spending policies for achieving more equitable education and health outcomes.
Empirical and model-based outputs highlighted
- Static microsimulation analyses based on household survey data to assess distributional impacts.
- Dynamic general equilibrium model simulations to assess macroeconomic and distributional consequences of budget-neutral reforms.
- Annexes and figures provide detailed empirical measures and decompositions (for example, Global Income Inequality: Gini Coefficient, 1988–2015; Decomposition of Global Income Inequality, 1988–2013; and many country- and theme-specific figures and tables).
IMF Fiscal Monitor: Tackling Inequality, October 2017
Content in this bundle
- fiscalmonitordatabaseoct2017 — Dataset overview
- 9781484317419.pdf
- Assumptions and Conventions -- Tackling Inequality; Fiscal Monitor; October 2017
- IMF Executive Board Discussion of the Outlook -- Tackling Inequality; Fiscal Monitor; October 2017
- Chapter 1. Tackling Inequality -- Tackling Inequality; Fiscal Monitor; October 2017
- Country Abbreviations -- Tackling Inequality; Fiscal Monitor; October 2017
- Executive Summary -- Tackling Inequality; Fiscal Monitor; October 2017
- Glossary -- Tackling Inequality; Fiscal Monitor; October 2017
- Preface -- Tackling Inequality; Fiscal Monitor; October 2017
- Fiscal Monitor Selected Topics -- Tackling Inequality; Fiscal Monitor; October 2017
- Methodological and Statistical Appendix -- Tackling Inequality; Fiscal Monitor; October 2017
- Infographic: Improve Access to Health and Education, IMF Fiscal Monitor, October 2017
- Infographic: Scope to Increase Tax Progressivity, IMF Fiscal Monitor, October 2017
- Infographic: Universal Basic Income, IMF Fiscal Monitor, October 2017