The IMF (Finally) Admits That Inequality Slows Growth
posted on TheNation.com by Kathleen Geier
http://www.thenation.com/blog/178726/imf-finally-admits-inequality-slows-growth
A big surprise this week was the
"release of a new IMF report that found that lower inequality is correlated with faster growth. This marked an amazing reversal. The IMF made itself notorious over the years through its strong support of anti-equality economic policies such as austerity budgets and radically weakened labor laws—all in the name of economic growth and development."
While this seems obvious to me
"Unsurprisingly, conservative economists and pundits continue to insist that high levels of inequality are necessary for economic growth—you don’t want things so equal that those sainted “job creators” go Galt on you, do you? But a growing number of economists are coming to believe the opposite.
Joseph Stiglitz and Paul Krugman, for example, argue that inequality has slowed growth. Late last year, Jared Bernstein wrote this excellent report about the impact of inequality on growth. The report zeroes in on three theories about the relationship between growth and inequality that are particularly promising."
See the article for the three theories.
The definition of economic growth from Dictionary.com is "steady growth in the productive capacity of the economy" It seems obvious to me that you cant have growth if 99% of the population is poor. IMO the major factor in continuing the wealth disparity gap is that the 1% have learned it's easier to gain wealth (their idea of growth) than actually create it via production.
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