Ravi Kanbur, Eduardo Ortiz-Juarez, Andy Sumner, 02 May 2022

Global inequality has fallen over the last three decades, despite a rise in inequality within some large countries. This column argues that the decline in global inequality will reverse in the coming years, due to a turnaround in the between-country component of inequality. This inequality ‘boomerang’ is forecast to happen near end-2020s or early-2030s, although an inequal recovery from the Covid crisis could hasten the reversal. Thus, the ‘sunshine’ narrative of declining global inequality could prove temporary, and a boomerang would require new policies to combat inequality in the future. 

Juan Pablo Cuesta, Swarnali Ahmed Hannan, 12 August 2021

Covid-19 has had a staggering adverse impact on lives and livelihoods, disproportionately affecting the poor and the vulnerable. To shed light on possible scarring effects, this column studies the effect of five past pandemics on output, unemployment, poverty, and inequality in the near and medium term. The findings reveal significant negative effects, although countries that provided relatively large fiscal support experienced limited output declines. Historically, increases in unemployment, poverty, and inequality were lower for countries with greater fiscal support and relatively stronger initial conditions, which included higher formality, family benefits, and health spending. 

Martin Ravallion, 03 August 2021

Economists have long debated the most effective metrics for measuring poverty and inequality. This column presents analysis of the relative importance of three prominent macroeconomic indicators – the rate of unemployment, the inflation rate, and the growth rate of GDP per capita. Using evidence from the US, the author argues that higher unemployment rates unambiguously increase poverty measures, but that inflation matters more in the middle and upper-middle of the distribution than in the tails.

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Keynote: Inequality and the future of capitalism

Wednesday Nov 11

06:00 PM - 07:00 PM (CET)

Special times call for special measures. That is why the annual UBS Center Forum for Economic Dialogue will this year take place online. The four-part event series focuses on different aspects of inequality - a topic that has become even more important in light of the global pandemic and its devastating consequences, which has hit many of the most vulnerable people in the world particularly hard.

In the sessions, experts from different fields will analyze the determinants and implications of economic and social inequalities and discuss possible solutions on how to address these issues. The event series started with an interdisciplinary research slam on the topic of inequality and prosperity, in which seven researchers gave an insight into current findings from their research areas in short presentations. Last week, behavioural economist Janet Currie, globalization and labour markets expert David Dorn, and inequality expert Branko Milanovic discussed the facts and consequences of inequality.

In the webinar on November 3, Florian Scheuer will give an outline of his research on the taxation of the superrich.

Concluding the event series, Nobel Laureate Sir Angus Deaton will elaborate on the topic of inequality and the future of capitalism, drawing on his most recent research.

Professor Angus Deaton believes that today’s inequalities are signs that democratic capitalism is under threat, not only in the US, where the storm clouds are darkest, but in much of the rich world, where one or more of politics, economics, and health are changing in worrisome ways. “But we need to think about repairs for democratic capitalism, either by fixing what is broken, or by making changes to head off the threats,” he stresses. Drawing on his most recent research, Deaton will reflect on whether and how the flaws of capitalism can be addressed to help build a more prosperous and just world.

Sir Angus Deaton is Senior Scholar and Professor Emeritus at Princeton University and Presidential Professor of Economics at USC. His interests span domestic and international issues and include health, happiness, development, poverty, inequality, and how to best collect and interpret evidence for policy. In 2015, he received the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for his analysis of consumption, poverty, and welfare.”

This session is supported by the Centre for Economic Policy Research (CEPR).

Branko Milanovic, 06 October 2020

Recent analyses of developments in global inequality have largely been based on relatively old data. By widening the country coverage and using household-based data from each country, this column surveys developments in the global income distribution since the 2008 Global Crisis and brings the analysis up to 2013-14. Broadly speaking, the post-2008 period was good for the globally poor and for the global middle class; it was not good for the Western middle classes and the global top 1%. If developments from the past three decades continue for another 20 years, the gap between the West and Asia will shrink further and will eventually entirely disappear.

Daniel Gallardo Albarrán, Robert Inklaar, 31 July 2020

Modern economic growth has improved the lives of millions in an unprecedented way, but its unequal progression across the globe has resulted in high income inequality. Most of the cross-country differences in income levels are typically attributed to differences in productivity rather than to physical or human capital accumulation. This column argues that this has not always been the case: physical capital accounted for a much larger fraction of income variation at the beginning of the 20th century. More generally, the results of the study call for a reevaluation of the long-term determinants of relative economic performance over time.

Branko Milanovic, 20 November 2018

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