Inequality has drastically increased in many countries around the globe over the past three decades. The widening gap between the very rich and everyone else is often portrayed as an unexpected outcome or as the tradeoff we must accept to achieve economic growth. In this book, three International Monetary Fund economists show that this increase in inequality has in fact been a political choice―and explain what policies we should choose instead to achieve a more inclusive economy.

Jonathan D. Ostry, Prakash Loungani, and Andrew Berg demonstrate that the extent of inequality depends on the policies governments choose―such as whether to let capital move unhindered across national boundaries, how much austerity to impose, and how much to deregulate markets. While these policies do often confer growth benefits, they have also been responsible for much of the increase in inequality. The book also shows that inequality leads to weaker economic performance and proposes alternative policies capable of delivering more inclusive growth. In addition to improving access to health care and quality education, they call for redistribution from the rich to the poor and present evidence showing that redistribution does not hurt growth. Accessible to scholars across disciplines as well as to students and policy makers, Confronting Inequality is a rigorous and empirically rich book that is crucial for a time when many fear a new Gilded Age.

About the Authors

Jonathan D. Ostry is Deputy Director of the Research Department (RES) at the International Monetary Fund. He is the author and editor of a number of books on international macro policy issues, and numerous articles in scholarly journals, including Capital Controls, with Atish Ghosh and Mahvash Qureshi (eds.)(Edward Elgar Publishing, 2015) and Exercises in Intertemporal Open Economy Macroeconomics, Second Edition, with Thomas Krueger and Chi-Wa Yuen (MIT Press, 1996).

Prakash Loungani is an advisor in the International Monetary Fund's (IMF) Research Department and an adjunct professor at Vanderbilt University's Owen School of Management and Johns Hopkins University's School of Advanced International Studies. Loungani has over 60 published works and has researched topics such as: assessment of macroeconomic forecasting performance; understanding trade linkages among nations and regions; and modeling the impact of oil prices on the macroeconomy.

Andrew Berg is deputy director of the International Monetary Fund's Institute for Capacity Development and adjunct professorial lecturer at American University. His work has appeared in South African Journal of Economics, Pacific Economic Review, Open Economies Review, and elsewhere

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