 izgledaj, kako posledamo v nekaj 22 hrvih. Čekaj imamo tukaj, izgledaj, izgledaj. In potem, po vse, imamo prezentacije grupov. V mojih nekaj 5 grupov, ker nekaj izgleda. Tukaj 4 in 5. Mi je, da je tako separat. Vse je 5 grubi, so od 3 do 4 grubi se vzvajamo toden grubi. Danes, potem, za pravdje, nekaj nekaj ne, se zvežimo metod, pred vse, tako kako pa odpravimo, vedno različne predvane za kljenje. When Matel beginning the introduction to his workshop, he mentioned that we, Ken and Wander, are organizing something for the future. Do you want to say something? And the synthesis after? No! Okay, and you finished. So, this is the plan for the next 20 hours. Tako da. Na njih ne rekonvino. Vse imamo skupnje, skupnje in skupnje, kako se pošli v tem, in tukaj, pa v kopi brek, svoji je svoj, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, kako se pošli, Mr. Bingen, tako, Andrei, for being here with us. The floor is up to you. Thank you, can you hear me? Yes. So many thanks for the invitation. It's a good pleasure to be here. Just before starting, let me answer the question that some of you could ask, but why an economist from a central bank is interested in equality? Well, I've been studying inequality for 30 years at the Bank of Italy and I was asked to do that by the bank. So it was my interest also, but that because the Bank of Italy has a very large research department, much larger than many traditionally, much larger than in other countries, in the advanced economies at least. I don't know about the other economies. And so we have always devoted great attention to issues concerned with inequality or more generally, distribution of income and distribution of wealth. The Bank of Italy has a survey that has been running for 60 years since the early 60s about household income and wealth. It is a sample survey among households and it is one of the longest running surveys in the world. So just a note of background. Now, I understand that most of you, if not all of you, are very mathematically oriented, very expert of complex systems and so on. My talk will be entirely non-mathematical. So I hope that you can understand what I'm going to say. I'm not too easy for you. And I decided to have a general talk about inequality. The title is very ambitious, but I will try to convey you the idea of what we know about inequalities and what are in my view some of the critical issues that will be, let's say, condition or affect inequalities in the future. So starting point is the fact that today in this seminar, this workshop is an example, everybody is talking about inequalities. If I take economics, when I started to work in economics that was more than 30 years ago, it was a very small field, very few people were working on inequalities. This is an example of the global and attention of the public, in the public debate to inequality, that is a report that Oxfam releases every year before the starting of the Davos meeting. This is the very last one published in January, last January, and it is entitled Survival of the Richest. In chapter one, the Nequality Explosion of Survival of the Richest, you see here a simple summary of the issues that are at stake, and that is the global interest for the topic. As I was saying, there is not always the case. I don't know whether you can read, but this is the paper, the starting of the paper by Tony Atkinson. Tony Atkinson is one of the big names, probably the biggest naming in economics among the scholars of inequality, who passed away five years ago, fortunately, sadly. Tony gave this presidential address as the Royal Economic Society in 1997, and he said, it is time to give further impetus to the reincorporation of income distribution into the main body of economic analysis. That has always been a point of Tony. Very few people care about economic inequalities at the time in economics. Not much happened in the following years until the great recession. The great recession or the global financial crisis, different way of mentioning that event. It was in 2008 and 2009. That is considered a turning point, maybe when we look at inequalities. Not because inequalities started to grow then, as many people think. Simply because people realized that something had been changing in the world. So Occupy Wall Street Movement, and the 1% entered into the public discussion. 1% was not used before. This is an example of Martin Wolf, the chief financial commentator, economic commentator of the Financial Times. That is an article that he published in 2012, if I remember well, 2012. He had several pieces discussing the big challenges for the capitalist economic system. And one of the challenges was to deal with inequality. You carry it by yourself. Maybe you carry it by yourself. It's not important. This is again the Oxfam report, the first one published in 2014. And that is Toma Piketi, a capital in the 21st century. That is a book that had a huge impact in the public debate. Toma Piketi was invited by Obama at the White House. And it had also to raise the interest of economists for inequality. Last but not least about these examples. This is a speech by Christine Lagarde when she was managing director of the IMF, the International Monetary Fund. And when she was managing director, put inequality as one of the big priorities of dealing with inequalities, one of the big priorities for the economic community in the world. This is important from many points of view because the IMF is by definition the most conservative international organization when dealing with economic policy. So it is a change of attitude that is important. So that was kind of background for my discussion. You will tell me about the time. I warn you that I have many more slides than my time will allow to present you. So I will try to be quick on some. But I would like to deal briefly with global income inequality. Then I will look at the inequality explosion that is the oxfarm terminology. How inequality changed within advanced countries. Sorry, but I'm not an expert of developing countries so I will focus here on some advanced countries. And then I will bring the discussion to some future developments. Some conjectures about what can happen. That is to stimulate the debate with you. If you want to ask questions, interrupt me without any problem. It's not a big problem. Now, global income distribution. The story here is relatively simple. That is the distribution function for income for the world as a whole. And the size of the areas are proportional to the population in the country. And on horizontal axis you have per capita income. And you can see the red one is China. So many people in China were close to this vertical line that is the absolute poverty line. So that is in 1988. What happens? And then you have the richest country here, the developed countries. And that is what happened. So that is what happened in between 1988 and 2011. That basically the story is that China but also India and other Asian countries down here moved rightwards. So there was a great increase of per capita income in the Asian countries that brought many people to the middle of the world income distribution. And what happened was reducing inequality because people moved from the bottom towards the middle in these Asian countries. You cannot see much here but for developing countries there were people here that didn't improve their incomes as it happened elsewhere. So the result of this was a strong decline in absolute poverty. We might discuss how it is computed later if you want, if you are interested. This is what I would call a heroic chart because it starts in 1820. So we didn't have surveys in 1820. We have only small sets of information and from that point of view these numbers are heroic but the trend is clear and especially clear here when we have many more data and many more reliable data to appreciate the decline in equality in poverty. That was for the world as a whole in aggregate but when you look at the distribution you see the deduction in the share of population in poverty in South Asia and East Asia quite substantial. But the point is that there was little improvement in sub-Saharan Africa and that is the trend forecasted by the World Bank couple of years ago in the COVID pandemic and they forecasted an increase because the improvement in sub-Saharan Africa has been much slower than in Asia and it is amplified by the strong population growth of these countries. As a result that is the trend of income inequality which is taking a very long period. This is from a paper by Branko Milanović this is a Gini index and I guess that you know what the Gini index is but it is the most popular index of inequality and it goes from 0 to 100 when it is expressed in percent it is not entirely true it can be negative but forget about that when it is 0 you have perfect equality when it is 1 or 100 it is perfect inequality in the sense that one person has all the income and all the others have zero. So you have a continuous increase of inequality during the industrial revolution then some increase even here before the Second World War there was a lower pace from 1950 till let's say late 90s early 2000s about here and that is the period of the Second Globalization but then it fell quite substantially in the last period so at the global level income inequality went down in the recent period and all this is due to the growth of the economies of essentially Asia or all emerging countries so it is what we call the between country effect that dominates the within country effect so the changes in the income distribution within the country that is I did spend some time on this curve that has become popular probably you have known about this you have heard about this curve before that was popularized by Branko Milanovic and that is the blue line it is called elephant of course because of this shape it is a different way of looking at what happened to the world income distribution on the horizontal line we have the percentiles of the income distribution and on the vertical line you have the income increase for the blue line between 88 and 2008 and for the orange wine between 2008 and 2018 what you can see is here that the improvement the increase of income was quite substantial here and especially the middle of the income distribution and this is the effect of the improvement in Asia then you have a very small increase in this area here that is 80 to 90 percent so 80 to 90 percent child of the income distribution and that is this area here is mostly comprising the bottom of the income distribution in rich countries so let's say the poorest in the UK, US, Europe in general and here you have the very rich that are in rich countries but not only in rich countries so this typical shape is what we discussed until the Greek recession after the recession but the more recent movement has been this one so continuous increase in the incomes in emerging countries and even at the top there has been a slowdown in income growth these are again estimates by Branko Minanovic so to put in a simple way and using the expressions that François Bourguignon put in his book on these issues what we have seen is the last quotation here what we have seen has been an internalization of global inequality as nicely put by François inequality between Americans and Chinese would be partly replaced by more inequality between the rich and the poor in America and China and what we saw at the global level became a problem inequality within each country which is the countries in terms of per capita income getting closer to each other but the story seems to change after 2008 now that is the global picture so to tell you what has happened and now what can we say about single countries now I will show you some charts for I think 8 or 10 countries starting with the UK and the US and these charts allow me to discuss a couple of methodological issues I know methodology is boring but it is critical but it is critical when you discuss inequality to understand the number of issues that I will explain better later but in these charts you see black lines and orange lines the difference is that the black lines are genetic coefficients and the genetic coefficient is the measure of inequality taking into account the incomes of everybody in the society so the gene measures the distance of my income from Matteo's income and from Giovanni's income and take the average of this difference the other measure here is the share of the top 1% so you rankle people by increasing income and you measure the share of income by the top 1% so the richest people in the society the other difference the top 1% share is the measure that was corporalized by tomapikety and coders they built a huge data set for many countries between the two lines because the top 1% usually is computed not for disposable income but for the taxpayers so it is a different concept of income receiver I will explain that later and final warning is that you have two different black lines for the UK for the US and the difference between these lines is that they come from different sources so one important warning is that there are many sources of income distribution data and they don't tell you the same story in the selection of the data I am going to present, I am focused on the services that allow me to look at changes between countries so they are not comparable across countries but relatively reliable for comparison over time within countries now this for the methodological part I started with the UK and the US because these are the two countries in the literature that experienced first a big increase in income inequality in the late 70s and early 80s and it coincides with the Reagan administrations in the US and the touch of government in the UK there is a connection between the two and there is also some causality because some of the measures that were taken by the two administrations went in the direction of not contrasting the increasing inequality in market incomes so incomes earned in the market through wages, self-employment income and profits so yes, no, no, no, no so you add up the incomes of all taxpayers and you rank the taxpayers you select the top 1% so in the country with 100 people you select one person and you take the ratio of the income of those top 1% to the total income so it is just a share of income and it is measured on the vertical axis so for example in the US it is around 20% now that means that the richest 1% of the population earned 20% of the total income and of course they tend to move often together but not exactly and they can move in different ways in some countries and some periods so in the US experience these changes this change this reversal of the previous trend from the Second World War in the same period but then they move differently so if you look this is UK, you see from basically in the early 90s onwards there are oscillations of the gene index but it is essentially a flat trend and even here big oscillations but there is not a substantial increase whereas in the US you have a much more steady increase in the quality according to all measures you see these spikes in the American in the US series here these spikes are due to the fact that this income concept includes capital gains capital gains are very concentrated in the top of the distribution and when you include capital gains in the assets but you realize, not potential, realize capital gains and it happens often because of changes in the legislation so in a year you realize your capital gains and you declare those incomes and that creates spikes in the distribution like this one or the one that we will see for Sweden so that is the case of the two Anglo-Saxon countries here we consider Sweden and Finland two countries that are at the other extreme probably among the less unequal country in the world in terms of income distribution but still both Sweden and Finland experienced a substantial increase in the income inequality but starting later about ten years later than UK and US so from this point of view we see an explosion of income inequality because for those four countries we see a substantial increase in inequality even if the timing is different and also the trends because if you take Finland again not much change in the last ten years so the increase was concentrated here whereas for Sweden the increase tended to be in the last longer Canada and Netherlands are the two countries and here the story starts to change a bit if you take Canada you see there has been an increase in inequality mostly concentrated in the 90s then flat and then a decline so if we take the gene index basically income inequality in Canada in 2020 is back to the levels in the late 70s so no explosion you see some explosion in the top 1% share of income Netherlands you have a story that is similar you have an increase in inequality in just before 1990 if you look at the gene index and then not much change if you look at the top 1% share you see not much change since the 1980s but the decline before so a story that is slightly different from what we saw before again France and Germany Germany very much concentrated increase in equality in the early 2000s tend to coincide with the so-called hearts reform in the labor market for the German speakers so it was a flexibilization of the labor market and also many jobs were distributed in that period that is a period associated but then not much happened afterwards and France again you cannot see much big increase in inequality some variations but not substantial increase quickly Italy and Spain in Italy we saw an increase in equality in the early 90s up to 1993 essentially from the lowest level probably reached in the early 80s and not much change if you consider the gene index since 1993-95 some fluctuations but not substantial increase the story is very different if you look at the top 1% share but that is a very different concept and well I don't want to spend the time in discussing how this line is concentrated I have some some reluctance to take it face value because of the main imputation but here the story is slightly different because we have a continuous increase in equality but it's not supported from the information we have from sample service for Spain it is interesting that is a big increase during the great recession but then inequality is back to previous level so again also in Spain we cannot see from these numbers a big explosion of inequality now so far yes please absolute but also within countries because we come back to that absolutely we should go more deeply in the analysis country by country of course the underground economy is relevant in Italy much less relevant in Nordic countries even in those cases there are examples of underground economy but it is not as big as in Italy it is a relevant issue in developing countries of course in the formal economy I can tell you that in the Italian data that are based on the sample service collected by the Vancouver Italy or the silk data collected by Estat people are asked about the let's say the take home income for the self-employed and we did some exercise and we found that we could capture some of the underground economy workers because they declared us their income we didn't ask whether it was regular or not but we asked also for information about social security contributions they had zero social security contributions so we guessed that those persons had a work in a occupation in the labor market that was not regular so the impression and we did other studies so our impression is that for Italy we captured some of the underground economy in the income distribution of course not all and of course the issue is tax evasion but the big issue for sample service is how you can capture the top of the income distribution because if income is concentrated you don't select the rich people in the sample simply because they are not selected randomly or even more warringly they do not answer but we could spend a lot of time discussing this issue coming to the first part of your question I think that the country-specific aspects about taxation, welfare system functioning in the labor market is crucial to understand inequality and sometimes neglected when people think about big forces like globalization and technology changes everything true but you have to put in the right context but we will come to that later these are USA and France again top 1% but here I am comparing income and wealth so far I have been talking about income if you take wealth the story might be different it is not in the US because this is income and this is wealth that is the dynamic of the top 1% share and you see that different levels wealth is much more concentrated than income but the shape is very similar so the temporal changes are very similar this is not the case in France where you have very little change in income but you have an increase in wealth inequality since the late 80s so this is important because the perception of people and the issue in the debate can be wealth versus inequality so it matters so let me summarize some of the things that I wanted to these are shares so that means that because you can have the income let me try to find an example you can have a more equal distribution of wealth and that is what is captured by this part here so the people in the top 1% to wealth reduces their share in total wealth but the rest but incomes that were earned because incomes are not only earned through wealth they are earned through working in the labor market transfer and so on so you could have reduced you can conceive to reduce the concentration of wealth and part of the incomes that you part of trying to find a simple example suppose that you tax wealth if you use tax to redistribute to the poorest people then that policy reduces the distribution of income or leave the distribution of income and change if it compensates other changes while it declines the inequality of wealth and I said that I am not convincing you but we should go through the algebra because wealth is a stock so wealth is what you have at a certain point in time then on wealth you can earn returns and that becomes part of income and goes there but this redistribution this is only the share of the top 1% that for example could go to people that are in the top 10% so it could be redistribution for example so it can happen it happened because these are true numbers the mechanism that can allow that must be investigated looking at the single numbers so understand that it is not a totally satisfactory answer but so what about this brief excursus about long run inequality changes the first is that the inequality index matter because the story is not always the same if you look at the gene index or the top income share and they would be different using other inequality measures there is a full battery of inequality measures then it matters the income definition and I will spend one minute later income versus wealth as I said and the time rise choice which income now even income is not a single concept you can think of wages and salaries what you earn in the labor market you can think of labor earnings including the earnings of the self-employed market income is what you earn in the market meaning labor incomes and profits and interest but not transfers and disposable income is what you can spend in consumption goods and services after transfers and after taxation so these are different concepts of income that are used and then there are many other issues I mentioned capital gains but you have also the issue about imputed rents so if you own your own housing do you treat the implicit income for that house in your income or in kind benefits so education health or in kind transfers provided by the state in most countries so now I don't have much time let me go ok let me jump this part here let me just show some numbers because this helps to understand what I am telling you so when I measure the gene index here gene index measured using the same data the Bank of Italy survey for 2016 the first line in the first bar in the chart is the gene index 20.7% for monthly earnings so it is what you earn every month if you are a full time employee and for the age group 1564 ok then the second bar is monthly earnings but now I change the population I include not only full time employees but also the part time employees in the same age class and you see that inequality increases because part time employees tend to be paid on average less than full time but this is monthly earnings the second then let's consider also the self employed so self employed and consider yearly labor earnings so we take the sum of all incomes earned in the labor market and also the self employed same age class and you can see that inequality increases here from here the last step is this very high bar this is yearly labor earnings so we sum all earnings in the labor market for all people in the household for all year but we consider all people between 15 and 64 years that means that we compute this gene index we give zero income to everybody in this age class that has no job, no labor earnings and you can see that there is a substantial increase in the quality so this is a way to show you that we are talking about earnings in the labor market so relatively narrow concept of income but moving from full time employees to include part time to include employees to include also those with zero income you have a substantial change in income then when we go to the household level so that is what I showed you the charts I showed you before we are for households the gene index we are for households so you put together all the incomes at the household level on a yearly basis then you have again you focus on persons 15, 64 or all persons and you have basically here from here inequality changes because I take into account the income from other sources including transfers and I also take into account the fact that households have a redistributive role because people earning money within the households transfer their money to the other component of the households so that is the distribution due to the households apart from transfers so this is the point I was mentioning why it is important to understand what is the concept of income you are using of the population so coming to the point briefly that was raised before when we look at this u shaped pattern of inequality that is true for most countries but not all but there are many differences in terms of timing and magnitude of the changes and that is a way in my view of concluding that there are common forces technology, demographics or globalizations that impact on the income distribution within each country but there are important national aspects in that distribution so the tax benefits system are a primary example of that so taxation and the welfare state for example regulations in the labor market or less restricted labor market if I have to tell you a very few words to summarize what are the interpretations or what has happened there is a large literature now looking at the changes in income inequality in advanced countries you see that the factors that are stressed by most our authors are more flexible labor markets factors that have increased inequality in the labor market but also for household income taxation reforms because taxation reforms have usually gone in the direction of reducing the top tax rates but also if you remember Sweden, Finland what happened there was the dual income taxation meaning that there was a different kind of taxation for labor incomes and transfers for household income that went into the direction of increasing inequality less generous welfare state as another part of the story even if welfare state remains still very important an interesting difference is that if you look at the literature for the US relative to the literature for Europe including UK that in the US the emphasis is a lot on the labor market or the markets much less emphasis on changes in redistribution through the government whereas in Europe we tend to look to look much more to changes in the welfare state taxation and so on public redistribution now 5 min no, I don't have more can I take 5 minutes more? ok now let me move to some conjectors here I was talking freely before but in here even more freely so if you have to think what's going to happen to income distribution to inequality in income in the future which factors should we consider and I think that some are the same factors that we are behind the trends we have been discussing so far globalization, technological change in automation demography, I didn't speak much about demography but aging is certainly something that will change greatly income distribution and immigration and also economic and social policy how they will be conceived in the future so let me spend sometimes on some of these issues don't have time for all globalization the discussion now on globalization after the great recession and even more after the covid pandemic is that globalization was based on what we call the global value chains global value chains increased a lot became much more important that the integration in production across the world has become much stronger single bits are produced in different parts the typical example is the iPhone where single pieces of the iPhone are produced in different countries and only assembled and eventually branded in the US so it is not a US thing but it is made all over the world for many goods and we saw the crisis with the microchips soon after the pandemic then there was the Russian invasion of Ukraine that complicated story even further and called into question what the principle of peaceful coexistence so now if you look at the debate on international trade it is dominated by words like reshoring nearshoring to short and global value chains offshoring was an important factor in globalization offshoring meant to move production from factories in advanced countries to emerging countries so some parts of the production were made in China instead of the US and similarly for Europe now the debate is about reshoring so bringing back some of these productions to the advanced countries whether US or Europe not much has happened so far big debate but very few hard data tell us that there has been reshoring there has been some kind of nearshoring the fact that now firms have a more diversified set of suppliers that are closer to the country we have seen some big globalization so the economist uses the term globalization so slowing slow globalization and indeed you see that there has been some reduction in the last period but not so substantial even if it is the first time since the second world war that there has been a reduction there is an index trade openness very simple it is just imports plus exports divided by GDP at the world level so first we have seen little but still the issue about national security and the organization the new organization of the global value chain is very open my view is that we are not going back to the past even if we can see some reduction in globalization unlike something terrible happens in the world and in any case globalization will be very very unlikely to bring back the productions to the old countries if you take the example of Italy Italy between 93 and 2019 lost one third of the industrial production textile clothing and leather goods so we are talking about the sector in which Italy was specialized and about half of the occupation of the employment sector this is not going to be back after it has been moved to other countries because you have lost production capacity and so on the other big issue is automation maybe some of you or most of you know about the work by Brinoz on the McAfee race against the machine in 2011 and they added this very terrible forecast about what was going on through automation part of the story probably happened part did not there have been some studies trying to understand how robot internet of things and artificial intelligence can destroy a labor human labor this is from a work by the OECD and this is for the OECD countries but if you take the OECD average is this one and you have that 40% of jobs have a high risk of being automated the gray line and 32% have a high probability of being significantly modified by technical progress how do they estimate this number just dividing each job in the separate tasks made in the job and see whether these tasks can be made by a computer or some automation procedure this is just in the middle we have much worse predictions much better predictions but still there is that automation can reduce labor substantially industrial robots is something that has been studied intensively and there is an important famous paper by Daron Semoglu who is a striper Daron Semoglu is a quotor of Jim Robinson that you had some days ago Daron studied a lot to these aspects they estimated that in that period in 2003-2007 in the US for every installed robot six jobs disappear robot is an automatically controlled programmable multiporcos machine that do not need does not need a human operator so according to the sms by smoglu restrepo six jobs disappear because of automation in the US even if three on aggregate were created in other sectors of the economy but the net effect is minus three jobs a colleague of mine has done the same exercise for Italy and he found no significant effect of employment in Italy on a longer period so far automation has not destroyed jobs even if Italy is the six countries in the world in terms of number of robots that have been installed and also this started by Graz and Michaels for 17 OECD countries does not find a big impact on jobs of automation and actually finds positive effects on total factor productivity and wages in these sectors so would say that the evidence is mixed but there are many other papers the evidence is mixed but certainly automation is something that can change the functioning of the labor market destroy jobs but it is also a big opportunity if you take into account that we have a substantial change in demographics aging population if you have an aging population shrinking labor force the possibility of replacing labor force with machines is something that we should look at not too negatively or not too worldly and indeed in other papers among the STREPO find that automation is more pronounced in industries that rely more on middle aged workers and also in countries that are undergoing faster aging there are policy challenges that have to do with the skills and competence of people and distribution of scarce labor across people now my time is over so I cannot talk about demography and other aspects but happy to take questions if you have and if I am allowed other five minutes thank you Andrea we collect some questions and then the collective answer came quickly just a couple of keywords one is artificial intelligence chat GPT is this the same as automation and second thing is during the pandemic I think there were quite heavily economic interventions transfer of state funds to bail out different types of what is the consequence of effect of that on inequality or whether that teaches us anything about how to reduce it thank you for the talk I find it useful always to distinguish between what we know and what we don't know especially when it comes to predicting the future and on that basis I feel a bit frustrated I'll confess when I hear 32% of jobs are at risk of automation why not 37% why not 12% and so it's something that I often hear in talks where we have overconfidence about predictions without even stating the amount of uncertainty we have and so I apologize for this being a bit of a criticism but it's something that has been frustrating to me thank you for the great presentation I have only a question relating to clarification in your second part of the talk before future development it was long run something you mentioned that in the case of the duality taxation of Sweden I would like only to know more about this phenomenon and I have a second question that second question that is related also with automatization and I would like to know your point of view regarding do you think that in the future maybe the board will be replaced for the board of the organization and how it will be deal with all of these issues thanks a lot very insightful I have a bit of a related question about some of the figures we saw which suggested actually that the increase in income in quality is sort of flattened off in the number of societies at the same time you showed us also some figures showing that arguably say the difference or dispersion in the degree to which jobs are precarious people have a safe job or not only part time employment temporary employment may have increased income inequality heights and increasing polarization security of labor and which risks come with that also sorry Andrea have you noted that there is a convergence in the level of top 1% for Italy, France, Canada and so on but not for us is it 12% I don't know if this is part of the story I have also a question do you think it is possible to fight inequalities with the redistributive policies or we have to work more on the predistributive assets? Ok, many thanks for the questions let me try to answer you asked about artificial intelligence and the impact whether it is the same or not of automation there are different phenomena of course and coming to the point that was raised it is difficult to predict and I am very let's say sympathetic with the criticism that it is difficult to predict this phenomena but I will come back to that later artificial intelligence to understand what could be the implication and all this debate of these days about chart GPT and the number of jobs that could be lost is based, that is really based on let's say fragile understanding we don't know yet my understanding is that one of the point that was made by Brinovso in McAfin's book that was more than 10 years ago is that artificial intelligence machine learning all these things could make change the legal profession for example something that somebody would not think to be affected by would think that humans are crucial in the legal profession but still there is a part of the work of legal profession that is going to the old trials to the old the corpus the doctrinal corpus of the laws and the decisions of the judges in trials that have to be inspected and machines are much quicker you can feed a machine with all this information and that was a work that took ages well not ages but months of work before that can be done very quickly and my understanding is that in the city of London where there are important low companies this has made an impact especially on the number of young people that we are typically higher for this work so this is an example I don't know enough but I guess that artificial intelligence can change the work the way we work I tried chart GPT and I understand asking what policy should be adopted to fight inflation and the answer was not not very satisfactory I couldn't use that with my boss at the bank of Italy well it is safe now but it won't be later I don't know it's difficult I think it will have an impact in terms of probably some jobs will be lost others will be created and needed and you had a most specific question about transfers during the pandemic during the pandemic at least in advanced countries we saw huge amount of money that was spent by governments to help households and firms it was very effective indeed in equality didn't rise substantially in most countries in some countries actually in the US personal income so the household income has increased as never before during the pandemic because of this huge money transfers and even equality went down in Italy there was some rising inequality but it was a relatively smaller rise and let's say that three quarters of the potential rising inequality was mitigated by the policies the problem is that that was the right thing to do then the problem is that now we have to face as the issue of the public debt that is much higher everywhere well in Italy it was already higher it was in Italy but that is something that will be inherited by future generation so it should be our concern you are very skeptical point about prediction as I told you very sympathetic I gave you that chart from LCD there are many other studies producing completely different numbers if you look at the study you understand that there is some serious work behind that they are not just number guest but still you have a huge range of potential yet it is worth doing that for two reasons first in institutions that is involved in policymaking when you are in policymaking you need to have an answer you have to need to understand what can happen you can put a huge confidence interval around your number but still you need to make some educated guess about what is going to happen and to take policy decisions you cannot act saying sorry but that is not our job so from that point of view it is important also for the public debate one thing that I didn't say automation everything concerned with technological change it is not something that comes from the heaven it is not exogenous as we say in economics it is endogenous it is due to choices made by firms, made by people made by government so if you decide to adopt one big technological innovation you should take into account that there might be negative effects or effects that you would not like to see and indeed Tony Atkinson before dying I wrote a book called inequality what can be done and he looked at different policies he had 12 different suggestions for policies the very first one was to look at technology not as a given but as something that should go through a public debate taking into account the human dimensions of technological adoption not to go back or not to adopt but thinking about what are the implications and what you have to do for example in terms of compensations for the losers when you adopt the technology so from that point of view the nihilistic approach doesn't work you have to be in any case positive very concerned very very careful about the quality of the predictions the problem and the uncertainty of the prediction dual taxation dual taxation means that you have a taxation of I cannot hear you sorry I know the definition dual taxation but my question was regarding with the specific case that you mentioned regarding with Sweden and Switzerland and yes and I would like to know more about this case thank you so what's happened is that this was because dual taxation is discussed in many other countries and it has been discussed in Italy dual taxation means that you go just for the others you tax labor income in the transfer with a traditional progressive taxation and you transfer income from capital with a flat tax so if you have this you create incentives to move from one category to the others because the owners of companies and corporations can decide whether to pay themselves a salary or a dividend so that opens that way but if you have part of the incomes from capital are taxed with a flat rate that tends to increase inequality because the assets are more concentrated at the top of the distribution I don't know whether this answer and that is what happened in Sweden and Finland it is specific of those countries as the countries that adopted first, well not only those I mean Norway, Denmark all Nordic countries moved in that direction does this answer it? you asked also something about automation but I can't yes in part I answered already I don't think that the board will be ever substituted from I know simply because there are capitalists that there will be all the time unless we change the distribution of assets I mean automation is adopted it's not as I was saying not mana from the heavens so if you are the owner of a big company you will remain owner of a big company can use automation to reduce the labor force but not to substitute yourself but that is my view I mean that is a pure prediction pure guess in this case polarization of labor and what happened in the labor market in Germany the story is very complicated because in Germany what happened is that the changes in the labor market in the early 2000s increased inequality but increased also employment that helped the economy at the time but then later there was no increase and indeed that the last analysis I have seen for Germany tend to think that the labor market has improved a lot in terms of opportunities for people but you probably what you meant is that there is an issue of quality of jobs because many jobs that is an important issue that is an important issue so far we have been discussing income or earnings there are other dimensions so for example for automation is the amount of hours that people work so I had a quotation from Keynes that I didn't discuss but the idea that in the future we will work less and less and that is something that I see is a good thing not a bad thing so if we use properly new technologies everybody can work less and spend more time in what can is called the important things in life except for the work alcoholic the precariness of jobs as this better dimensions that the jobs are bad in many different perspective because they don't provide security in terms of income to people security in terms of occupation they tend to be the people most of them they are not stepping stones for permanent jobs but many people are framed in this situation of precarious jobs they don't invest in the skills and the firms don't invest in the skills so what is a characteristic of the labor contract can transform into a bad characteristics of the jobs and the skills and the quality of the person so from that point of view we should be very concerned about flexibility flexibility is not bad by definition it is bad when it brings to this segmentation of the labor market in some who are framed in that situation and some others that are not that is the point convergence, I don't know I don't think that you can make that point because the point is that the comparison of top 1% incomes depends too much on the different tax systems in the countries they are too different might be one should spend a lot of time in understanding whether you can compare seriously across countries even within countries there are problems of changes in taxation and in general I don't believe in the iron laws of the economy I mean the economy changes and the yes no there was the last question by Giovanni I don't like the term predistribution so we are sociologists we like Jacob Hacker predistribution means nothing predistribution is distribution after the distribution of primary pre-distribution it's a vague concept the point is that it is distribution in the market before predistribution by the government ok and that depends on many different things depends on the rules in the labor market for example whether unions can have an effect on the distribution of wages on big debate in the US about the minimum the impact of the minimum wage on the distribution it depends on the distribution of assets ownership of firms and so on it depends on many different aspects I believe that we should put much more attention to the distribution in the market all market incomes like Mauricio Franzini, I totally agree with that it's not easy we should understand what to do but certainly predistribution is not the only cause I think in the last is not the only answer and one big issue that is my last word is how to distribute the benefits of innovation so who owns robots and machines the fact that somebody who gets the rents of artificial intelligence just the inventor it is something that I speak for these many people the academic intellectual environment that is a big debate in when somebody proposed to was to propose that Microsoft owner to tax robots but still there is an issue who is the owner of invention and that is related to predistribution and I stop here