Benedict Clements, co-editor of an IMF book on Inequality, discusses “one of the defining issues of our time”
Inequality is at the forefront of the economic policy
debate today in much of the world
---------------------------------------------------------
How is the IMF contributing to
the debate about rising income inequality?
On many fronts. First, we are
doing new research on the causes of inequality and its macroeconomic
implications. Second, we are doing studies on how economic policies and reforms
can help countries achieve their equity goals. Our book on Inequality andFiscal Policy is an example of this kind of research. Third, we are
deepening our work on individual countries in the context of our annual
consultations with them.
What’s the importance of this
work?
In many countries, achieving
more “inclusive” growth—the kind that creates a high number of jobs and does
not increase inequality—is a priority. In this context, policymakers are
eager to know the effects of economic policies on inequality and the effects of
these policies on economic growth. As an advisor to countries on
macroeconomic and fiscal policies, the IMF has an important role. In our
book, we look at the evidence and provide guidance for policymakers and Fund
staff on these issues. The good news is that there are many reforms that
both reduce inequality and boost growth. Greater use of property taxes to
raise revenues and the reform of energy subsidies are two such
examples.
How much has French economist
Thomas Piketty’s book fueled this debate?
Piketty’s work has helped draw
attention to the issue. This is just one of many excellent studies that
have documented the rise in inequality. Of equal importance is the work
that examines what countries can do to address it.
In your own case, what attracted
you to economics and in particular to fiscal issues?
During my college years, I took
a trip to Latin America with the Maryknoll Fathers, who work with the
poor. That trip helped show me that economics really matters when it
comes to poverty and inequality. I’ve been interested ever since.
Benedict Clements is a division chief in the Fiscal Affairs
Department of the IMF. He has worked in the IMF since 1991 and has published
extensively on public finance and macroeconomic issues.
