## Chart of the Week: Growth and Inequality

_IMF Blog, February 13, 2017_

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**Canonical URL:** [Chart of the Week: Growth and Inequality](https://www.imf.org/en/blogs/articles/2017/02/13/chart-of-the-week-growth-and-inequality)

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## Bibliographic details
- Authors: iMFdirect
- Published: February 13, 2017

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### Overview
- Publication: iMFdirect
- Date: February 13, 2017
- Core observation: In the past two decades, low-income economies have seen a rise in growth, with fewer living in poverty. Yet inequality in many countries has remained virtually unchanged.
- Purpose: Summarize findings from a recent IMF paper on how policy design can help spread the economic benefits of growth more broadly.

### Key findings
- Economic growth in low-income economies has increased over the past two decades.
- The increase in growth coincided with fewer people living in poverty.
- Despite these gains, inequality in many countries has remained virtually unchanged.
- Long-term reforms can produce infrastructure and productive assets described as "bridges, banks, firms and fields of grain," but these reforms take time and may not immediately help the poorest.

### Policy recommendations (short run and long run)
- Long run:
  - Pursue structural reforms that generate sustainable growth and build assets (e.g., infrastructure, financial institutions, firms, agricultural productivity).
- Short run (to complement reforms and assist the poorest):
  - Use targeted cash transfers to farmers who suddenly lose a grain subsidy.
  - Implement a more progressive tax system to distribute burdens more fairly.
  - Expand access to banking services to improve financial inclusion.
- Rationale: Because reforms take time and the poorest cannot always wait for transformation, governments need redistribution and targeted measures to ensure that growth benefits are shared.

### Outcome goal
- Ensure reforms are "tweaked or completed by measures to ensure a win-win for all in low-income economies."

*Source: Chart of the Week: Growth and Inequality — iMFdirect, February 13, 2017.*

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_Source: https://www.imf.org/en/blogs/articles/2017/02/13/chart-of-the-week-growth-and-inequality_