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From VOA Learning English, this is the Economics Report.
A new report says income inequality is hurting the potential for growth around the world. It says the best way to deal with the inequality is by helping poor people and the middle class.
The report is based on an International Monetary Fund study.
Opinions about income inequality are not hard to find. Many people are concerned about the issue. Kalpana Kochhar is Deputy Director of Strategy, Policy and Review Department at the IMF. On Monday, she said, “The gap between the rich and the poor is at the highest level in decades in advanced countries, and inequality is also rising in major emerging markets.”
The new report is called “Causes and Consequences of Income Inequality: A Global Perspective.” Ms. Kochhar said, inequality trends have been mixed in emerging markets and developing countries. Some countries are experiencing falling inequality rates. However, inequality in education, health care, and finance remain in areas such as Latin America, Middle East and Africa.
The report suggested that policymakers direct their attention on the poor and middle class to create economic growth. The organizers of the study found that a one percent increase in the earnings of the richest 20 percent of people led to a nearly one percent decrease in GDP growth over a five-year period. An increase in the income share of the poorest 20 percent, the study found, led to more than a one-third percent increase in GDP.
Kalpana Kochhar said that is “a fairly powerful message” for policymakers and researchers around the world.
