Tackling Income Inequality Requires New Policies
IMF Blog, May 15, 2019
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Bibliographic details
- Authors: The Editors
- Published: May 15, 2019
Overview
- Publication: May 15, 2019
- Event context: Roundtable discussion on income inequality opened by IMF Managing Director Christine Lagarde during the IMF’s 2019 Spring Meetings.
- Participants: IMF Managing Director Christine Lagarde; IMF Chief Economist Gita Gopinath; World Bank Chief Economist Pinelopi Koujianou Goldberg; OECD Chief Economist Laurence Boone.
Major findings and observations
- Inequality trends:
- “If you look at advanced economies there’s certainly a trend towards an increase in inequality between 1990 and now.”
- “But then when you look at emerging and developing economies, it’s more mixed.”
- Global income inequality has dramatically decreased over the last several decades, lifting millions out of poverty, while inequality has risen dramatically within countries.
- The top one percent owns about half of the world’s wealth.
- Drivers of growing income inequality identified:
- The hollowing out of the middle class
- Rising social and political tension
- Lack of education
- Globalization
- Rapid technological change
Policy perspectives and recommendations discussed
- Inclusive growth as a priority:
- “Inclusive growth is one of the critical challenges of our time,” — Christine Lagarde.
- Focus on promoting growth that benefits all.
- Human capital and opportunity:
- Equity aims to “give everyone a chance to have the potential to do good work; to actually deploy their potential.” — Pinelopi Koujianou Goldberg.
- Emphasis on addressing inequality of opportunity, not just income, including greater access to technology and better education for rural populations. — Laurence Boone.
- Gender and inclusion:
- “Another way to better address income and inequality is through women…a lot of work that the IMF has done shows that helps.” — Gita Gopinath.
- The presence of three women as chief economists at multilateral institutions highlighted as an achievement illustrating the value of inclusive policies.
- Taxation and redistribution:
- Scope to level the playing field among large multinational corporations to ensure firms “pay their fair share of taxes to create value and employ people.” — Laurence Boone.
- Redistribution identified as “a channel that hasn’t been used enough.” — Gita Gopinath.
Agreed direction and collective action
- Consensus that not all policies are created equal; policy choice matters for addressing inequality.
- Call for stepped-up global cooperation to tackle growing inequality:
- “What is it we could do differently compared to what has been done in the past?” — Pinelopi Koujianou Goldberg.
- Panelists agreed that now is the time to increase global cooperation on inequality-related policies.
- Collaboration and time constraints noted:
- “I think if we had five more minutes we would have solved everything.” — Gita Gopinath.
Source: IMF blog — Tackling Income Inequality Requires New Policies (May 15, 2019).