Frankel, J. (2014) “How to address inequality“, VoxEU Organisation, 29 April.
Awareness of inequality is rapidly rising. This column argues that commentators should focus on identifying the policies that are best suited to improving income distributions efficiently, and the politicians that support them. It is not sufficient to sound the alarm about inequality and the political reach of the super-rich.
Inequality has received a lot of attention lately, particularly in two arenas where it had not previously received as much: American public debate and the International Monetary Fund. A major driver is the observation in the US that income inequality has now returned to the extreme levels of the Gilded Age (Piketty 2014).
– The share of income held by the top 1% rose from 8% in 1980 to 19% in 2012 – a level last seen in 1928, and probably the highest among advanced countries (Alvaredo et al. 2014).
– The share held by the top 0.1% rose from 2% to almost 9% currently – a level least seen in 1916.
And mobility remains as low as ever (Chetty et al. 2014). Inequality has increased in many other parts of the world as well (Cassidy 2014). The major exceptions are Latin America, where it has always been very high and remains so, and parts of continental Europe where it remains relatively low.
- Ostry, J., Berg, A. (2014) “Treating Inequality with Redistribution: Is the Cure Worse than the Disease?”, iMFdirect Blog , 26 February.
- Oxfam (2014) “Working for the Few”, 178 Oxfam Briefing Paper, 20 January.
- Oxfam (2013) “A Cautionary Tale: The true cost of austerity and inequality in Europe”, Oxfam Briefing Paper, 12 September.