{ "title": "Redistribution, Inequality, and Growth", "publication": "Staff Discussion Notes, February 17, 2014", "sourceUrl": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291", "canonical": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291", "overlayPath": "/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/index.md", "summary": "The Fund has recognized in recent years that one cannot separate issues of economic growth and stability on one hand and equality on the other. Indeed, there is a strong case for considering inequality and an inability to sustain economic growth as two sides of the same coin.", "sections": [ { "heading": "Summary findings", "content": "- The Fund has recognized in recent years that one cannot separate issues of economic growth and stability on one hand and equality on the other.\n- There is a strong case for considering inequality and an inability to sustain economic growth as two sides of the same coin.\n- The Fund has been cautious about recommending redistributive policies because such policies may themselves undercut economic efficiency and prospects for sustained growth (the so-called “leaky bucket” hypothesis written about by the famous Yale economist Arthur Okun in the 1970s).\n- This SDN follows up the previous SDN on inequality and growth by focusing on the role of redistribution.\n- It finds that, from the perspective of the best available macroeconomic data, there is not a lot of evidence that redistribution has in fact undercut economic growth (except in extreme cases).\n- One should be careful not to assume therefore—as Okun and others have—that there is a big tradeoff between redistribution and growth; the best available macroeconomic data do not support such a conclusion." }, { "heading": "Policy implications and interpretation", "content": "- Redistributive policies should not be assumed a priori to harm sustained economic growth except in extreme cases.\n- Advice to member countries can incorporate redistribution concerns alongside growth and stability objectives, recognizing the empirical finding that a large tradeoff is not supported by macroeconomic data.\n- Policymakers and advisors should weigh distributional goals against efficiency considerations but avoid blanket assumptions based on the “leaky bucket” hypothesis." }, { "heading": "Publication and metadata", "content": "- Title: Redistribution, Inequality, and Growth\n- Authors: Jonathan David Ostry, Andrew Berg, Charalambos G Tsangarides\n- Publication date: February 17, 2014\n- Series: Staff Discussion Notes No. 2014/002\n- Issue: 002\n- Volume: 2014\n- Pages: 30\n- DOI: https://doi.org/10.5089/9781484352076.006\n- Stock No: SDNEA2014002\n- ISBN: 9781484352076\n- ISSN: 2617-6750\n- Subjects: Fiscal redistribution, Income distribution, Income inequality, National accounts, Personal income\n- Keywords: drives redistribution, Fiscal redistribution, Gini coefficient, Global, Growth, growth-inequality nexus, Income distribution, Income inequality, Inequality, inequality-growth relationship, market inequality, net inequality, Personal income, Redistribution, SDN, spell duration\n\nContent based on the IMF Staff Discussion Note \"Redistribution, Inequality, and Growth\".\n\n---\n\n Content in this bundle\n\n- sdn1402 - Executive Summary\n - sdn1402 - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - sdn1402 - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291" } ], "bullets": [ "[Markdown version](/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/index.md)", "[Structured JSON version](/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/index.json)", "[Bundle manifest](/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/bundle-manifest.json)", "Authors: Jonathan David Ostry, Andrew Berg, Charalambos G Tsangarides", "Published: February 17, 2014", "Series: Staff Discussion Notes", "DOI: https://doi.org/10.5089/9781484352076.006", "The Fund has recognized in recent years that one cannot separate issues of economic growth and stability on one hand and equality on the other.", "There is a strong case for considering inequality and an inability to sustain economic growth as two sides of the same coin.", "The Fund has been cautious about recommending redistributive policies because such policies may themselves undercut economic efficiency and prospects for sustained growth (the so-called “leaky bucket” hypothesis written about by the famous Yale economist Arthur Okun in the 1970s).", "This SDN follows up the previous SDN on inequality and growth by focusing on the role of redistribution.", "It finds that, from the perspective of the best available macroeconomic data, there is not a lot of evidence that redistribution has in fact undercut economic growth (except in extreme cases).", "One should be careful not to assume therefore—as Okun and others have—that there is a big tradeoff between redistribution and growth; the best available macroeconomic data do not support such a conclusion.", "Redistributive policies should not be assumed a priori to harm sustained economic growth except in extreme cases.", "Advice to member countries can incorporate redistribution concerns alongside growth and stability objectives, recognizing the empirical finding that a large tradeoff is not supported by macroeconomic data.", "Policymakers and advisors should weigh distributional goals against efficiency considerations but avoid blanket assumptions based on the “leaky bucket” hypothesis.", "Title: Redistribution, Inequality, and Growth", "Authors: Jonathan David Ostry, Andrew Berg, Charalambos G Tsangarides", "Publication date: February 17, 2014", "Series: Staff Discussion Notes No. 2014/002", "Issue: 002", "Volume: 2014", "Pages: 30", "DOI: https://doi.org/10.5089/9781484352076.006", "Stock No: SDNEA2014002", "ISBN: 9781484352076", "ISSN: 2617-6750", "Subjects: Fiscal redistribution, Income distribution, Income inequality, National accounts, Personal income", "Keywords: drives redistribution, Fiscal redistribution, Gini coefficient, Global, Growth, growth-inequality nexus, Income distribution, Income inequality, Inequality, inequality-growth relationship, market inequality, net inequality, Personal income, Redistribution, SDN, spell duration", "**sdn1402 - Executive Summary**" ], "related": [ { "title": "sdn1402 - Executive Summary", "role": "document", "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/sdn/2014/_sdn1402.pdf", "summary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/sdn/2014/_sdn1402.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/sdn/2014/_sdn1402.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/index.md", "json": "/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/index.json", "bundleManifest": "/en/publications/staff-discussion-notes/issues/2016/12/31/redistribution-inequality-and-growth-41291/bundle-manifest.json" }, "generatedAtUtc": "2026-09-21T00:00:32.020Z" }