Fair and Inclusive Markets: Why Dynamism Matters

By Philippe Aghion, Reda Cherif, Fuad Hasanov

February 5, 2021

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Format: Chicago

Philippe Aghion, Reda Cherif, and Fuad Hasanov. Fair and Inclusive Markets: Why Dynamism Matters, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We show empirical evidence that there may not be a tradeoff between market income inequality and high sustained growth, which is key for poverty alleviation. We argue that the economies that achieved high sustained growth and low market income inequality are characterized by dynamism—a drive toward sophisticated export industries, innovation, and creative destruction and a high level of competition. What a country produces and how much it competes domestically and internationally are important for achieving fair and inclusive markets. We explore policy options to steer industrial and market structures toward providing growth opportunities for both workers and firms.

Subject: Competition, Inclusive growth, Income, Income distribution, Income inequality

Keywords: Creative destruction, Industrial policy, Inequality, Innovation, Laggard firm, Manufacturing, Market power, Monopsony power, Panel data, Sophistication, Supply firm, Technology company, WP

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/029
Stock No:

WPIEA2021029
ISBN:

9781513568669
ISSN:

1018-5941

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