Inequality Hazardous to Growth – IMF study
It is now well-known that income inequality is hazardous to human health and a host of other social outcomes, asÂ demonstrated by Richard Wilkinson and Kate Pickett’s bookÂ Â The SpiritÂ Level and Equality TrustÂ organization (some great resources and slides there, too).Â
Now a new study by the International Monetary Fund has found that higher rates of income inequalityÂ are strongly associated with shorter periods of economic growth: e.g., that greater equality is associated with more sustainable and longer-lasting economic growth.Â
The research paper, Inequality and Unsustainable growth: Two Sides of the Same Coin? is relatively short (20 pages) , provides robust quantitive evidence with qualitative analysis, examines reasons for this relationship and suggests some tentative policy implications.