Redistribution for Growth? Income Inequality and Economic Recovery

Rudolf Traub-Merz (ed.); Friedrich-Ebert-Stiftung, Shanghai, May 2012

Studies on income distribution usually point into one direction only: wages are stagnating or declining, rural-urban income differentials growing, Gini coefficients climbing and other indicators of income disparities are worsening as well. The gap between the rich and the poor is rapidly widening in most countries. Only a few countries appear to be able to withstand this trend or turn it back. Economic growth in emerging economies may have been important to finance the reduction of absolute poverty, but in developed and emerging economies alike, it is accompanied with an increase in inequality. Today, a new world economic crisis is looming and there is growing concern that the world economy has entered a phase of structural stagnation and further growth is hampered by the existing level of inequality. Justice based criticism on income disparities is joined by macro-economic considerations calling for a new growth model based on balanced current accounts and an increase in household consumption. Under the title »Redistribution for Growth? Income Inequality and Demand-led Economic Growth in Emerging Economies« the Shanghai Academy of Social Sciences (SASS) and the Friedrich-Ebert-Stiftung (Shanghai Office) jointly organized an international conference on May 10-11, 2011 to discuss the interplay between economic growth, income inequality and the need for redistribution policies. Country reports focused on emerging economies (Brazil, China, India, Mexico, South Africa) but for comparison, developed economies (Germany, South-Korea, USA) were included. Encouraged by the acclaim which greeted the conference and the fascinating contributions to the debate the Friedrich-Ebert-Stiftung decided to publish the contributions – most of them revised –in two volumes, one in Chinese, the other in English.

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