 I'm going to be very brief, I have some questions for Ravi at the end, so I want to make sure that I leave time for him to answer those. So Marcus and I came from the same meeting in Berlin this week, and I think our thinking has been shaped in slightly similar directions, and Marcus has some very specific things to say, so I also want to leave time for him. Okay, so, okay, should I stand here, let me move this, is that better? So very broadly, what did we talk about in this session? We talked about the fact that we need more data, we need better data, and we need new theory. Okay, that's not exactly, that's rather too broad a brush, that would apply pretty much to any session we could be in. So I want to talk very briefly about the WID data. I think you and your wider needs to be congratulated on the production of this amazing data set. It's highly transparent, it's very well documented. And does know exactly where the data is coming from, and very importantly, there's no imputation. So unlike with the SWID data where one appears to have data, but a lot of that data is in fact generated by the database rather than coming from an original data source. Having said that, of course, Kathleen Beagle yesterday in the session on Africa made this point that data is still fraught, even if you've done as much as you possibly can in the office to try and harmonize that data, the fact is that what comes from the original statistical agency is not necessarily the same. These data sets all use very different, well, somewhat different survey methodologies. They have different reference periods for consumption across different types of surveys. There are very different sampling methodologies. The data producers themselves tend to truncate the data, they deflate in different ways. And one can't entirely address those issues when you get the data after the fact. So I do think that we need to see more collective action globally on standardizing how survey methodology happens. And I think there have been massive movements in that direction within, certainly within the EU and within the OECD countries, but for the developing countries, I think beyond the massive efforts of the World Bank, we haven't seen that much push towards getting stats agencies to do things in a consistent way. I think where we're moving to is towards saying, well, survey data takes us part of the way. But actually, most countries now have an increasing push to make available administrative data as well. And so I think where the frontier now is in terms of trying to say, how do we combine these two things? If we have survey data for most of the distribution, but we know that the survey data is probably missing at the top end of the distribution, are there good ways in which we can combine that with administrative records? So both of these data sources have their own issues. Tax register data has some missing records, either because of tax evasion or because taxes are only correct, of course, for a small proportion of the population. The household surveys have problems of unit non-response and potentially inaccurate information. So even if we have both data sources in a country, I think combining those data sets is quite a fraught exercise. I want to very quickly show you two slides for South Africa. So this is South African data, where we use a household survey, which is the blue line, and we use tax record data, which is the red line, just for the very top end of the distribution. So these are the richest 8% of adults in South Africa. And we see that there's quite some similarity between those two distributions, which seems quite comforting. When we look at that in detail, we find that even within that small part of the distribution, there's quite a lot of consistency in the two data sets, except right at the top of the distribution. So that seems like a very plausible story. One doesn't expect to find the very richest households participating in the household survey, so one might then think, well, this is excellent. We've got tax register data for the very top. We've got household survey data for everybody else. So even in a situation like that where you've got quite a lot of consistency between the data, you still have a whole lot of issues to address in terms of at what point of the distribution would you try and join these two distributions? And how do you deal with the inconsistencies? And so I guess I'm wondering a bit about what one then does, even if one has this type of data. How would a database like WID ever try and incorporate data that is in some sense synthetic? And so I think as we move towards a situation where more and more countries are producing these types of data, one needs to think hard about how one might standardize methodologies out of time. So I'm going to pose one question to Ravi because I don't think he spoke for nearly long enough. The chair already asked him a question about inequality of opportunity. I had another question for him. So we've heard that we need more empirics. OK, so we need to understand better what is the nature of inequality. We need to understand better the drivers of inequality. And then as Ravi said, we need much more theory to try and fit to those empirics. And something that was very hot in yesterday's business price was this new work by Charles Goodheart, who's the former chief economist for the Bank of England, who said the Piketty thesis is dead. Piketty is history on the basis that demographic change is going to make a massive difference in the future. So he makes this argument that the global labor force is no longer going to continue to grow nearly so fast, that therefore the returns to labor are likely to rise rapidly, and therefore we are in a very different world. And I'd love to hear Ravi's response to that. So to sort of caricature it, he's saying we've been worrying that the robots are going to take all the jobs. Maybe we should be worrying instead that the robots aren't taking the jobs nearly fast enough. So that's my rather difficult question to Ravi. Thank you. Thank you, Professor. Professor Ingrid Ullard is professor in the School of Economics at University of Cape Town and principal research officer of the Southern African Labor and Development Research Unit. She has been studying a lot on the National Income Dynamics study. Thank you for complimenting our presentation. Now I would like to invite Professor Marcos Senti to be short. There we are. Since it's me standing between you and lunch and possibly a couple of questions from the audience, I'm going to be extremely brief in my remarks. I did prepare a few sets of comments on each of the papers, but in fact I'm going to skip those and go directly to two issues which relate to both Fintarpe and Yocapirtiles and Ravi's discussion. So Ravi, in the text I got ahead of the conference, there's an interesting discussion about the impact of family background on economic outcomes and how that might affect inequality. And Ravi touched on the issue of the formal equality of opportunity approaches developed by people like John Romer. Now one of the interesting things, it used to be believed in a text very well formulated by Milton Friedman in the 1950s that essentially that if you have more inequality in the cross-section you're going to have more dynamism in the economy and consequently you'll observe more mobility in the economy. It turns out that once people started looking at intergenerational mobility across countries, the opposite turned out to be the case. There's this notion of the great Gatsby curve as formulated by Alan Kruger at the time, the chair of the Council of Economic Adviser in the US which essentially argues based in both on economic theory and on empirical observation that you're going to observe more intergenerational mobility if you have less inequality in a country. It turns out also that even if I think Ravi's reservations about equality of opportunity can be quite well founded if you look at the correlation between intergenerational persistence and equality of opportunity, you find the same kind of thing, but the countries with a lot of equality of opportunity are the ones with quite equal outcomes in the cross-section, they're also the ones with not so much intergenerational persistence. So these things may all be, in fact, these kinds of good things may all be positively correlated with each other. Now from this, of course, it flows that in the Western world where inequality has been on the increase in the past, yes, in the, among most OECD countries, if we do indeed value equality of opportunity, things like having outcomes being less dependent on your family background, we're going to see less of these good things as inequality increases. Whether or not that's true is anybody's guess, but economic theory seems to support it, empirics seems to support it. And most people, when queried, say they support equality of opportunity, so this may be one of the reasons we should be worried about inequality. Of course, once you explain to people what equality of opportunity actually means, that support tends to evaporate, but that's then a completely separate matter. So I think, but I do think we're in dire need to know more about both equality of opportunity and the importance of family background for economic persistence, despite the fact that, say, the World Bank with Chico Ferreira and others before have done admirable work in finding these things out, but many of these things we could very easily find out a lot more about in surveys, as long as we're actually interested in finding them. So that about the equality of opportunity. Another one of these kind of, I think, old ideas, which are well worth discussing is Arthur Oaken's great trade-off. It's a wonderful book, well worth reading 40 years after the fact it was written, where Arthur Oaken, I think it's frequently misunderstood what he actually was trying to say. He wasn't saying that there's this terrible trade-off that if you want growth, you have to give away equality. That's, in fact, quite different from what he said. What he said was that if there is such a trade-off, we need to realize that we want both more equity and we want more growth. And then we need to kind of make a decision about how much we want to trade-off of the one against the other. His solution was definitely not to abandon equity and take all the growth he can. Now, as a consequence of the kinds of things Joe Stiglitz was talking about today, we now know that this trade-off may look quite different, and in many cases there is no such trade-off. It then follows that those who say that focusing on distribution is some kind of luxury we can afford once we've gotten sufficient amounts of growth really should think things through again. And in fact, this is one of the reasons I think Oaken's book is clearly well worth reading still, because Arthur Oaken was a macroeconomist who really took equity quite seriously, but was worried about this leaky bucket. It turns out that in many cases the bucket doesn't leak at all. So the people who still believe this should probably update their beliefs in view of what the world actually looks like. Thank you so much. I think we did talk many different aspects of inequality, mostly from the point of a macroeconomics. I would like to invite Dr. Kanbura a little bit to add from your observation on this discussion. Well, let me perhaps I can respond quickly to the points that Marcus and Ingrid raised. On inequality of opportunity, I think my concern has really been that it should not be used as actually a device for standing in the way of progressive redistribution policies. Because the moment you move to redistribute, the argument is made you're violating the inequality of opportunity because this income was justly earned by their own efforts, et cetera, et cetera. I think that's my big concern in this regard. And so when we have a philosophical structure which separates out circumstance from effort, and then we have an empirical effort to separate those two out, both of which, as I argue, are really very dicey things to do. And then we use the motherhood and apple pie notion of the phrase, equality of opportunity. Because when you start to talk about, if you go into a policy discussion and start talking about redistribution policies, you say, oh, you're a dangerous lefty. But you say, no, I'm for equality of opportunity. Oh, please come in. Let's discuss and so on. And we very happily go into the room. But then when the door shuts behind you, you realize that actually the ticket on which you came in, the other person has something very different in mind. And you say, well, what I want to do is to redistribute parental income because we know that that's one of the main determinants, let's say, of children's test scores and outcomes, et cetera. No, no, no. That's not what I had in mind. Because to do that would be to violate equality of opportunity, that the effort doctrine of the parent. So that's been my policy concern, leaving to one side the conceptual difficulties and the econometric, empirical difficulties, and the thing. Let me make one other observation on separation of efficiency and equity. Again, this is a very deep-seated trait in economists. I don't know if some of you remember, maybe Joe remembers, James Meads tracked the Intelligent Radicals guide to economics. It was actually self-consciously sort of a reflecting George Bernard Shaw's track, The Thinking Woman's Guide to Socialism and so on. So he said, the radical part of the Intelligent Radical is that the person is concerned about distribution. But James Meads said it was that the Intelligent Part is that the Intelligent Radical will not use market mechanisms, rather will not interfere with market mechanisms, with the pricing mechanisms, to get out those objectives. So you get the classic sort of thing, you have property redistribution, but marginal cost pricing. It's those twin things, and you have a separation of equity from efficiency. So it's not just separation in that sense, but in terms of policy instruments, that this set of policy instruments are targeted towards that, and that set of policy instruments are targeted towards that. And I think it's that separation, which is very deep in our training, which has actually been questioned by the developments of the last 20, 30 years. Thank you for very interesting response and analysis. I think we still, at us, in a way, by habit, or by training, or by preoccupation that the suspicion still exists. I'm sorry to say that this is suspicion that the redistribution or fiscal policy can really help the inequality. But I think that at the same time the opportunity, inequality of opportunity, has some different aspects, philosophically or economically. It needs to be analyzed in more detail with the scientific data. Anyway, I would like to invite questions from the audience. I hope someone would raise the not only inequality question within OSD and developing countries, from a macroeconomist point of view, but also extreme poverty and poverty related to inequality in developing countries. Please, please introduce your name properly and make a question. Can you hear me? My name's Jim Davies. I'm from the University of Western Ontario. One thing that's next in inequality is climate change. In fact, it's already upon us. Just a couple of relevant examples here. Ravi was talking about the stability of inequality in the MENA area. One thing that's been suggested to me, actually, by colleagues in other disciplines, climate people, is that there was an increase in food prices leading, in the period leading up to the Arab Spring, and that that fueled the discontent and led to some of the political activity at that time. So I don't know whether that's absolutely true or not, but it suggests that we need to think about what's happening to prices for people at different levels of the income distribution. And clearly, if there's a surge in food prices, the real income of the poor is going down and there's a systematic change in income distribution, which we don't capture if we don't have adjust for those price changes. The other thing I would mention is, here's a plug for some of my own work. Together with John Wally and Xiaoyang Shi, I had an article in Journal of Economic Inequality last year about the interaction between carbon tax and inequality. If you use the revenue from a worldwide carbon tax, you could have an enormous impact and redistributed, you could have an enormous impact in reducing inequality. That might seem like pie in the sky, but actually something, this is an issue that does need to be addressed, because within each country there's a lot of empirical evidence that shows that carbon tax is regressive. So something has to be done to offset the regressive effects. We need the carbon tax in order to save the planet, and you can't escape that. And it has distributional impacts. Because we need the other questions, so please make your questions short. Oh, I'm all done. Thank you. Your question must be addressed to Professor Kambu, right? Everybody? You can take some questions. And please. I'm Andrea Cornia from the University of Florence and formerly at Wider. I have two very quick questions. Now one is for Ravi. When Ravi commented the trends, and I praise him for pointing out that Toma Piketty basically talks about the OECD countries, it looked like that you were attributing the changes in the patterns, I mean the rise in the falls, basically to Kuznets. And my argument would be, well, it is important to try to separate what is due to sort of endogenous factors, like China is exhausting its labor reserve, and so wages are rising, and therefore, blah, blah, blah. And what is basically driven by policy? Now in Latin America, the decline is there's been no changes in the labor reserve, and then basically the decline is been due to a massive increase in expenditure on secondary education and on redistribution by social security. Now if you look at Malawi, when Malawi had the falling inequality, this was large something like the starter part in agriculture, and what has kept the inequality law in Ethiopia, with the gene at 26%, has been, again, agricultural policy which has been favorable to that. So I think from a policy perspective, it is very important to separate what is sort of endogenous to what is policy driven, because if we discover what policy is, then we try to replicate. Now a very quick question to Fin. In doing our work on Africa, we are a little bit scared because we use WID, and we complemented WID. But now the World Bank is doing this re-standardization using the micro data, and they will be coming out soon with the new estimates of the gene. So will WID be including this I2D2 new estimates based on re-standardization of micro data? One more question. Yeah, you were the first. Thank you. Andy Summler from King's College. My questions are kind of normative in a way. I mean, first of all, thanks for a great panel. I think WIDA should have lifetime funding for 200 years for what it's done on the WID and inequality work. It's a data set that everyone's going to use. I mean, I have it on almost daily use myself. I think there's a slight issue with the SALT data set. I'm judging by your very diplomatic comments that the author there didn't enter into a long dialogue and negotiation discussion with you. I suppose there's a worry, of course, that these data sets become, as Andrea just made about, these data sets don't become competitors, I guess, and how they can all be put together. So my questions are actually more about the normative questions about inequality, what next, but they relate to a lot of what's being said. The first thing is, no one's responsible for global inequality, but clearly governments are responsible for national inequality. Does that mean national inequality actually trumps global inequality? I'm not saying global inequality doesn't matter, but maybe our focus, there's a normative question, maybe our focus should be national inequality, because that's what someone has responsibility for doing something for. The second normative question is really about the measures of inequality and the fact that Atkinson's point from the early 1970s, about the measure you choose has normative assumptions embedded in it. Of course, the genie is very sensitive or oversensitive in the middle and less sensitive relative to the extremes, and it made me wonder about whether do we need a measure of inequality that covers the whole distribution or do we need a measure of inequality that's about the bits of the distribution that are important, either the richest and the poorest, which pushes you more towards ratios. I'm not going to mention the Palma ratio. And the final question is just about redistribution. And I was thinking about this, and some of the work I've been doing recently is dividing the world up into segments to look at redistributing the growth increment rather than redistribution per se. And what we found is the world could have easily ended $2 poverty already and could probably have ended $4 poverty already with the growth since the Cold War if those on over $30 a day had had slightly less growth of their consumption. So I wondered whether there's anything to say about the redistribution question about focusing on the patterns of growth and the growth increment, which arguably is politically easier and relates to the inequality of opportunity question than going after a redistribution per se. Thank you. Well, because time limit, I would like to invite panelists to respond first and see if we can do some more. Would you please start? Yeah, so just very, very quickly, Andreas, I fully agree actually. In fact, if I had more time to discuss the detail of the Chinese phases, those are very much policy-related phases. And one of the reasons why we're seeing this, I believe we're seeing this turnaround is specifically related to a policy which came in from the mid-2000s onwards under the harmonization label and so on. So I was trying to get the cousinessing purely from the rural-urban population shift point of view, although even that is related to policy, the Hukou and so on. Yeah, so I wasn't... On climate change and inequality, I think again, a very important set of issues, and I tell you my great fear is that given the instruments that we currently have, the only way we might have of fixing the inter-temporal externality, the inter-temporal market failure that we have might be on the backs of today's poor. I mean, that's my great fear. And you sort of alluded to that in terms of carbon tax and so on and so forth. And we can see that from a standard public economics standpoint. If we had sufficient instruments, if we had sufficient lump sum transfer instruments and pricing instruments, we could fix the inter-temporal externality and our current distributional thing. So a lot on the inter-temporal market failure, inter-temporal externality, and we're looking at instruments which do that. But those same instruments one can show, and you alluded to carbon tax and so on, could very well have distributional issues in the current generation. And therefore we need more instruments to address that. And in fact, it's a transfer instrument, which I think is what we need. And the $100 billion that's been mentioned in the context of the Copenhagen, Paris agreements and so on, those are the sorts of things that we should be thinking of. And on global inequality, again, very interesting normative question. What exactly is the normative import of global inequality per se, compared to within country and between country inequality? So we have a file decomposition, which gives you a global file and within and between country file. We can show the graphs, et cetera, but should they be weighted in some way to say that actually this is more important than this component, the between of within is more important than the others. And it depends on what normative framework you have. So if I think of ourselves as being behind a global veil of ignorance, behind a global roles in veil of ignorance, then one might think of global inequality as being the thing, and everything else as being instrumental, simply as a component. And the main critic of that view was Rawls himself, who argued that in fact you have to look at the jurisdiction over which the social contract is actually being negotiated, and that for Rawls was the nation state, rather than some fugitive global government in this way. So what normative framework one has matters here a lot in this context. Before I address to Dr. Pintar, I have a little question in the extension of this question. The reason why we are talking about and concerned about inequality is because increasing inequality within OECD country, advanced countries mostly. Because we have, you have presented that inequality global scale in a relative scale has been decreased while absolute scale has been increasing. And then inequality between countries have declined. So is it because advanced countries have a problem while developing countries have less problem, or inequality itself is hurting everyone, and then we have a global problem on global scale. This is my question, not as an economist, but as an ordinary person to ask. I just remember that I haven't responded to Ingrid's point about the demographic change. And I don't really have a proper response to it except to say that there isn't a single, there isn't one single global demographic issue, so to speak. In the African context we have very different demographic patterns compared to China, let's say, or compared to other countries. And indeed it's a very OECD perspective that Charles Goodhart is putting forward in that context. So that would be mine. Thank you. Thank you very much for a very good set of questions and comments. Now, obviously we can continue the discussions both over lunch and in the corridors and so on. And I do want to highlight that there is a session tomorrow, which continues straight on from our discussion today, where the countries I mentioned before are going to be in focus plus the global. I mean, I hope it's clear from what I've been saying that I completely agree with Ravi's last points that your sort of normative assessment of these things does matter a lot. And this was in many ways a little bit what I was trying to get across. Now, let me first say that I'm not against imputation per se. I mean there are situations where it makes a lot of sense to try to impute. Being careful and doing it in a very sensible way. But a mindless effort where you just plug in an algorithm and then just push the button and then the output of that is put up as if that were the real world. That is what I personally consider to not be particularly careful. But carefully executed imputations where you are trying to account for things where you have a lot of reason to expect that there are issues. Such as, for example, in the top end of the distribution, I consider that to be absolutely appropriate and very sensible to try to account for that. And one of the challenges and one of the inherent things in this is that I want to convey that this is certainly something that we are in the process of discussing how we can do that. But we are not going to how can you say make an adjustment and then go on saying this is the real world. Then we will be very careful in specifying what, for example, has been done to correct for the top end. Now, this leads me also to and that relates a bit to what Jim was saying. There are lots of cases where it jumps straight into one's face that we do not have a global specialized inequality surveys like we have household surveys. I mean, the inequality measures that we have are derived from surveys that are conducted for other purposes and we should not one single minute forget that. You could ask the question whether in the midst of discussions around the post-2030 agenda and so on one should not put that up that there is that issue that really when we are thinking about and we're trying to measure and so on whether there isn't actually a need to be addressed by those who are taking these decisions rather than just trying to do the best with what we have and make adjustments and so on and so forth. Is there a space for a major initiative along the lines of the Living Standard Measurement Service but on the inequality area? I'll just leave that as a question but I think it is an important point and it's an important point because White has actually just conducted a 16 country comparative study of African countries where we have very detailed looked at what some called the Boken Young Triangle in other words try to do the best we could to make growth inequality and the last part of it the consumption growth to make that could we actually come up with a convincing story and what comes out over and over again is that major developments in food prices and things that are happening at different spaces in the distribution are not caught in our regular household surveys now what that means is that we do have to take this challenge serious in a very different way also because this is where we bring the sort of complementary information we can put together and we are missing a lot that inequality part of it so I would strongly say that and for example just to be very specific take Tanzania or take Mozambique the data we have suggest limited inequality increases now why I mean anybody who knows sort of Tanzania and Mozambique will probably say that inequality has somehow gone up it's probably buried in this fact that prices, food prices affect people across the distribution in very different ways than what we actually capture and a fact such as that people in different parts of distribution are not paying the same price for the same good well we often don't capture that so those kinds of things are looming in the background when we are discussing that to the chair's discussion about the global and the national I mean obviously national policymakers are responsible for their countries and that was sort of how can you say the implicit hint that I made when I made a reference to my own government but it is clear that there is a global set of issues where we need of course sometimes to be a little bit careful that we don't take the US and then think that what's happening elsewhere is exactly the same and that was the other sort of part of the warning that I tried to leave with you I think that's what I would respond here and now I think there are some people who are not happy with their own government including Dr. Tarp and Professor Stiglitz and probably myself too now I would like to invite Jukka to to compliment some questions very briefly thank you excellent interventions from both on the floor and then by the discussions very briefly just one point that regarding Ingrid's and its observations that the how can we improve to be, we are very very interested in developing it further and all comments along these lines of ideas are very welcome so this is not meant to be the final word on this but for example how to give even more information would be one idea which we need to think about but thanks useful comments I think there are some more questions but I think we have overrun so I hope you will continue by group overlaunch or individually and continue to contribute thank you very much for your attendance