NYT: IMF report on neg effect of inequality on economic growth

[Leon Sompolinsky, CFR]

http://www.nytimes.com/2011/12/17/opinion/blow-inconvenient-income-inequality.html?_r=1&nl=todaysheadlines&emc=tha212

An April report from the International Monetary Fund found that
growing income inequality has a negative effect on economic expansion.
The report said that long periods of high growth, which were called
“growth spells,” were “much more likely to end in countries with less
equal income distributions. The effect is large.” It continued:
“Inequality seemed to make a big difference almost no matter what
other variables were in the model or exactly how we defined a ‘growth
spell.’ ”

Our income inequality could jeopardize our recovery.

Yet another Gallup report issued Friday found that most Americans now
say that the fact that some people in the U.S. are rich and others are
poor does not represent a problem but is an acceptable part of our
economic system.