At a global level, there has been convergence of opportunities and outcomes, but this is only because the gap between advanced and emerging economies has narrowed. Within societies, virtually without exception, inequality of outcomes both within and across generations has demonstrably increased. 4 The big drivers of globalisation and technology are magnifying market distributions. 5 Moreover, returns in a globalised world are amplifying the rewards of the superstar and, though few of them would be inclined to admit it, the lucky. 6  1  See Ostry, Berg and Tsangarides (2014). 2  See Alesina, Di Tella and MacCulloch (2004); Wilkinson and Pickett (2009). 3  In 31 of the 39 countries surveyed by Pew Research in 2013, half or more of the population believed inequality to be a “very big problem” in their societies (Pew Research Center, 2013). 4  The Gini coefficient pertaining to household disposable income rose from 0.26 in 1961 to 0.36 in 2008 in the UK, and from 0.39 to 0.46 over the same period in the US, according to data collected by Atkinson and Morelli (2014). Those data show this to be a common pattern across many advanced economies. In emerging markets, Gini coefficients remain high relative to the average for OECD countries, and rose between the 1990s and 2000s for India, China and the Russian Federation, though falling for Brazil (OECD, 2011a).
With clear risks of a misplaced if not lost generation, to the extent appropriate under our mandates, the monetary policy response has represented a race against long-term (or hysteretic) unemployment. As Janet Yellen remarked, “the risk that continued high unemployment could eventually lead to more-persistent structural problems underscores the case for maintaining a highly accommodative stance of monetary policy.” 18 In Britain at least, these risks have been sharply reduced. The Bank of England has used a range of policies first to stimulate and then to secure the recovery. These have helped support the strongest job growth on record including record-high transitions back into employment by the longer-term unemployed. Longer-term social mobility will benefit from this track record. Looking ahead, improvements in policy frameworks should help to reduce – but not eliminate – the incidence of financial crises. A core lesson of the recent episode is the need to think of  14  For example, using data on over 30,000 households in 38 countries, Easterly and Fischer (2001) find that the poor are more likely than the rich to mention inflation as a top national concern. Moreover, higher inflation is associated with greater income inequality in cross-country data (Albanesi, 2007). Financial crises in developing countries are associated with an increase in poverty and, in some cases, income inequality – see for example Baldacci, de Mello and Inchauste (2002).