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Global Risk of Rising Inequality

Samvel S. Lazaryan () and Mariya A. Chernotalova ()
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Samvel S. Lazaryan: Financial Research Institute, Moscow 127006, Russia
Mariya A. Chernotalova: Financial Research Institute, Moscow 127006, Russia

Finansovyj žhurnal — Financial Journal, 2017, issue 4, 34-46

Abstract: This article addresses the problem of rising income inequality in developed countries. According to the latest research, although inequality can influence economic growth both positively and negatively and existence of both channels has been confirmed empirically, currently negative impact of income inequality on growth dominates. During the last 25 years technological progress and, to a lesser extent, global integration have been shaping a global trend of rising income inequality. Empirical evidence suggests that impact of these processes on income inequality has been uneven across various countries, and in 50 % of developed countries we do not find significant increase in income inequality during the last 25 years. At the same time, given that technological progress, automatization, trade and financial integration will probably gather pace, we should expect a more pronounced increase in income inequality in most of countries over the medium term. Improving quality of institutions and providing equal opportunities to all members of society should be the key components of policy response to this global risk of rising income inequality.

Keywords: income distribution; inequality; Gini index; technological progress; globalization (search for similar items in EconPapers)
JEL-codes: O15 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:fru:finjrn:170403:p:34-46