French riot police face off with protesters during clashes at a demonstration against government’s pensions reform plans in Paris as part of a day of national strike and protests.
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Inequality looms larger on policymakers' agenda today than it has in a long time. With the political and social backlash against the established economic order fueling the rise of populist movements and street protests from Chile to France, politicians of all stripes have made the issue an urgent priority. And whereas economists used to fret about the adverse effects of egalitarian policies on market incentives or the fiscal balance, now they worry that too much inequality fosters monopolistic behavior and undermines technological progress and economic growth.Tax and transfer policies that redistribute market income fall within the post-production category.Today's inequality also calls for a different approach that focuses on the economic insecurities and anxieties of groups at the middle of the income distribution.Likewise, current street protests in Chile come after two decades of significant reduction in income inequality. Clearly, the discontent stems from inequality of a different kind, affecting mostly the middle of the income distribution. A key part of the problem is the disappearance (and relative scarcity) of good, stable jobs.Economists are coming to recognize that combating the resulting polarization depends in large part on reinvigorating the economy's capacity to generate good jobs.
The changing face of economics
It’s time to tackle inequality from the middle
Democracy on a knife-edge across the world
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