KENNETH ROGOFF writes: Judging by the number of times phrases such as “equitable growth” and “the distributional footprint of monetary policy” appear in central bankers’ speeches nowadays, it is clear that monetary policymakers are feeling the heat as concerns about the rise of inequality continue to grow. But is monetary policy to blame for this problem, and is it really the right tool for redistributing income?
Gita Gopinath writes: The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies. Our latest global growth forecast of 6 percent for 2021 is unchanged from the previous outlook, but the composition has changed.
- The COVID-19 pandemic has exacerbated socioeconomic inequalities.
- Mitigating inequality requires a mix of bottom-up and top-down changes that address the underlying social and economic systems.
- Seven experts shine a light on creating a future that leaves no one behind.
The COVID-19 pandemic has probably caused the greatest economic, political and social damage to humanity since World War II. In fact, it will accelerate and deepen some of the pre-existing processes and trends and will confront us with new challenges and scenarios at the global level, the scope of which we barely glimpse.
Ours is a time of exciting technological change. The era of smart machines holds the promise of a more prosperous future for all. But it demands smarter policies to realize that promise. To capture potential gains in productivity and economic growth and to address rising inequality, policies will need to be more responsive to change as technology reshapes markets. And change will only intensify as artificial intelligence and other new advances drive digital transformation further—and at an accelerated pace in the aftermath of the COVID-19 pandemic.