10 must-read economics stories of the week
Jennifer Blanke, Chief Economist, World Economic Forum
A list of some of the week’s most interesting stories on economic growth and social inclusion.
1. Facts and figures: it’s possible that the next generation will grow up poorer than their parents. A new McKinsey report highlights that more than two-thirds of households across 25 advanced economies are suffering flat or declining real incomes. And the hardest hit are young, less-educated workers, raising the spectre of a generation growing up poorer than their parents. (McKinsey)
2. Even in countries with high growth rates, achieving inclusive growth is difficult. The Philippines has averaged economic growth of 5.4% since 2006, but its poverty rate has remained stubbornly high — almost 30%. (CNN Philippines)
3. It’s clear we need an alternative measure of economic progress. Some countries fare better at converting economic growth into well-being. (World Economic Forum)
4. Wealth inequality may not work the way Piketty thinks. A paper from the International Monetary Fund challenges Thomas Piketty’s research on global inequality. (Bloomberg)
5. Will cutting interest rates increase inequality? Since low interest rates make it cheaper to borrow money, assets such as shares and property become more attractive. Greater demand has pushed up prices of these assets — and because wealthier people start with the largest holdings, they benefit most from any increases value, thereby widening wealth inequality. (BBC)
6. And does raising the minimum wage reduce inequality, or does it actually lead to lower pay? One case study suggests that competition amongst contractors has created a ‘fissured workplace’, resulting in a downward pull on pay and working conditions. (Financial Times)
7. Economists don’t fully understand the link between EU membership and productivity growth. That’s one of the conclusions of a recent eBook examining the repercussions of Brexit. (VoxEU)
8. Brazillionaires. Another new book examines Brazil’s Olympic-sized inequality problem, and some suggest that the country holds the key to understanding global inequality. (New Republic)
9. Mining social media data can help us understand social inequality. A pair of researchers are using Instagram to reveal nuances in inequality in New York City. (Citylab)
10. And tackling socioeconomic inequality may also help solve problems of mental health. Studies have repeatedly shown that mental health issues are inversely associated with class, so policies that reduce inequality may also go some way toward addressing mental health issues. (Newsweek)
Originally published at www.weforum.org.