Ostry, J., Berg, A. Tsangarides, C., (2014), “Redistribution, inequality, and the sustainable growth: Reconsidering the evidence”, Voxeu.org, 6 Μαρτίου.
Inequality has the potential to undermine growth. However, greater redistribution requires higher tax rates, which reduce incentives to work and save. Moreover, the evidence that inequality is bad for growth might simply reflect the fact that more unequal societies choose to redistribute more, and those efforts are antithetical to growth. This column presents evidence from a new dataset on pre- and post-tax inequality. The authors find that income equality is protective of growth, and that redistributive transfers on average have little if any direct adverse impact on growth.
Rising income inequality looms high on the global policy agenda, reflecting not only fears of its pernicious social and political effects (including questions about the consistency of extreme inequality with democratic governance), but also its economic implications. While positive incentives are surely needed to reward work and innovation, excessive inequality is likely to undercut growth – for example by undermining access to health and education, causing investment-reducing political and economic instability, and thwarting the social consensus required to adjust in the face of major shocks.
Σχετικές Αναρτήσεις
- Ostry, J., Berg, A. (2014), “Treating Inequality with Redistribution: Is the Cure Worse than the Disease?”, iMFdirect Blog , 26 Φεβρουαρίου.
- Dolls, Μ., Fuest, C., Neumann, D. and Peichl, A., (2014), “Fiscal Integration in the Eurozone: Economic Effects of Two Key Scenarios”, EUROMOD Working Paper 1/14, Ιανουάριος.
- Wolff, G., De Sousa, C., Sapir, An., and Terzi, Al., (2014), “The Troika and financial assistance in the euro area: successes and failures”, Bruegel, 19 Φεβρουαρίου.