Inequality and Growth
The IMF takes a new tack on Inequality, this is for an organization that many in government think means “Its Mostly Fiscal”. An article in the New York Times today points out a shift in policy that could have far reaching effects.
The IMF’s long stated goals:
1) Sustained economic growth;
2) Low inflation;
3) A balanced budget;
Has been joined by a fourth goal:
4) Distribution of Income
As the managing Director Christine LaGarde says “In a broad sense, the mandate is financial stability, and anything that is likely to rock the boat financially and macro-economically is within our mandate.”
This policy suggests a new consensus: Economic policy cannot only be about promoting low inflation and robust growth. Healthy, stable economies also depend on a reasonably equitable distribution of the awards.
An IMF staff paper recently concluded: Income equality can be of macro-economic concern for country authorities.
See full article by Eduardo Porter here: http://nyti.ms/1qhvL3Q