The COVID-19 pandemic has exposed and exacerbated inequality both within and between countries. Provision of public services that benefit low-income groups such as education and health has been severely disrupted, and job losses concentrated among low-income groups in areas such as entertainment, travel and tourism.
Furthermore, large pre-existing inequalities worsened the effects of the pandemic. The poor have been less able to protect themselves from the virus and its health complications, and inequality could rise further due to scarring on labour markets and large educational losses.
The IMF’s Fiscal Affairs Department (IMF FAD) has documented these effects and made far-reaching proposals as to how governments should respond through spending to improve access to more efficient public services paid for by enhancing tax capacity and/or increasing progressivity of the tax system.
Vitor Gaspar and David Amaglobeli present the IMF’s research findings on the pandemic-related causes of rising inequality and the most appropriate policy response.
Key questions include:
What policy interventions can help counter rising inequalities, improve social mobility and promote growth in the post-pandemic world?
Is there a genuine choice between higher taxes and increased public borrowing to pay for stronger public services? How does this choice vary between countries and over different time frames? What is the level of public support for different options?
What lessons should one draw from the IMF’s research for this autumn’s UK budget and public spending round?
How do the IMF’s proposals fit with recent moves towards a global minimum corporate tax?
How should the response to rising inequality be integrated into the radical policy agenda required to transform of the global economy in response to the accelerating threat of climate change?
As with all member events, questions from the audience drive the conversation.