The Unassuming Economist

From a new IMF report:

“Inclusive growth is a priority that resonates globally today. It relates to a broad sharing of the benefits of, and the opportunities for, economic growth, and reflects growth that is robust and broad-based across sectors, promotes productive employment across the labor force, embodies equal opportunities in access to markets and resources, and protects the vulnerable.

The G20 has emphasized the need for inclusive growth. In this regard, the Hangzhou G20 leaders’ Summit in September 2016 renewed the emphasis on inclusive growth called for the forging of both a narrative for strong, sustainable, balanced and inclusive growth and for adopting a package of policies to make this possible. The communique stated that the G20 would “work to ensure that our economic growth serves the needs of everyone and benefits all countries and all people including in particular women, youth and disadvantaged groups, generating more quality jobs, addressing inequalities and eradicating poverty so that no one is left behind.” G20 Ministers returned to this in March 2017 in Baden-Baden noting that: “We reiterate our determination to use all policy tools––monetary, fiscal and structural––individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth, while enhancing economic and financial resilience.”

Economic growth and inequality, the two sides of inclusion, have a complex nexus that can generate tradeoffs. Growth is the basis for generating inclusion. Across countries, growth has been instrumental in narrowing income gaps; within countries, growth has reduced poverty and made possible higher living standards and job opportunities. But policies driven by an exclusive growth focus can also set back inclusion in certain circumstances. While some inequality is integral to a market economy, high and persistent inequality can undermine the sustainability of growth itself.”

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