 Well, it's important for several reasons. First, it is not actually such a consensus in the literature that that's the case. You can tell stories, of course, why that should be true. Unequal countries. That's to say, countries with unequal income. Often political power is more evenly distributed than that. And so one would expect the societies to come up with ways to redistribute that income. There are a number of reasons to think that that might not be true. First of all, if you're, well, depending on how cynical you are, you probably don't think it's one person, one vote, even in a democracy. Sometimes people talk about $1, one vote. So it's, for example, Stiglitz talks a lot about this in his 2012 book. And so far as that effect is powerful, that's to say that the richer people have more political influence. It's not obvious how that's going to work out. But another feature is that since it's been hard to measure redistribution, people have had trouble identifying this effect empirically. They do things like they try and look at the relationship between inequality and the size of the state as a proxy for redistribution or the size of the amount of taxation or the amount of subsidies as a proxy for redistribution. But we know that many of those things are poor measures of redistribution. In many countries in the world, education spending is regressive. It mostly goes to tertiary or even in some poor country secondary education, which mainly benefits the better off, for example. So it's not been easy to look directly at this question about redistribution and inequality. And Brogol Milanovic in some earlier work has shown that when you measure both sides pretty well, you tend to see that relationship. And it's a pretty powerful effect on the whole, especially in the OECD, most of the differences between OECD countries in market inequality are undone, if you want, by the tax and transfer system, more than half, as an average matter. So for example, you can ask, the US is an outlier and that is very, among the rich countries, it's quite unequal in terms of net income inequality. Some of that is because it's relatively unequal in market income. But most of it is because for a country of its degree of market inequality, it redistributes relatively little. So it's kind of an outlier in redistribution more than it is an outlier in market inequality. So this was the central question we looked at in our initial paper, was what is the story about the relationship between inequality and growth? And in particular, you could tell various stories about the relationship between inequality and growth. Many people have argued that inequality is a necessary condition for growth and that more inequality probably leads to more growth. For example, in unequal countries, rich people get more of the money and they probably save and invest more. So that should lead to more growth. And there are other stories you can tell kind of like that. Other people have argued that for various reasons, inequality could be associated with low growth. In unequal societies, poor people are gonna have less access to health and education than we know from all sorts of micro-evidence that health and education can be good investments or are generally good investments. And sometimes this is labeled credit market imperfections which sounds awfully clinical, but it's a very general situation in which if you're a poor person, you tend not to be able to kind of finance good investments in health and education. It just doesn't happen. And so you under-invest. And so that's a reason why inequality could hurt growth. There are other reasons. Inequality could cause political instability and political instability could be bad for investment. Inequality can make it, it's argued by people like Danny Roderick that inequality can make it hard for countries to generate the consensus required to adjust to difficult times. This is an argument that was really asserted strongly back in the last round of crises in the 80s, in the late 70s and early 80s, when it was observed that more equal countries seemed to be able to roll with the punches of those shocks back then. World interest rates went way up, oil prices shot up. Countries got into problems with external debt, many of them did. Some countries managed to raise revenues, cut spending, adjust and keep growth going. Others could not, they continued to borrow until they couldn't and then they had to work their way over a decade or more out of a debt problem. And one of the differentiating factors seems to some people to have been inequality which makes it hard for people to get together and make, which arguably makes it hard for societies to make decisions that are in the benefit of everyone but which may hurt some people more than others. In other words, is it, should society, people in a political system for example can spend time arguing about how to divide the pie where they can try and make the pie bigger? And in a very unequal society it may be more fruitful in a narrow sense to worry about the division of the pie. And so equality sets the stage maybe for better reactions. Now that's a generalization, of course political systems are different, countries are different, this is only a broad generalization but those are the kind of ideas that were out there that we were trying to test. So we looked at the data, we tried to say when countries are more equal do their growth booms last longer? Is their growth rate higher in subsequent periods? Once you control for the standard determinants of growth and we found indeed that this is really a salient result, that's to say it's a result that comes out, doesn't matter too much which sample you use, what other variables you put in the regression, it seems to be a relatively strong result. It is almost hard to believe in a way. It is a very strongly held view that redistribution must be bad for growth because we tend to think about certain mechanisms, we tend to think about the disincentive effects of higher taxation but there are plenty of other mechanisms out there that matter as well. We know that there's under investment in health and education because poor people don't have resources to do that kind of thing. We know that people who lose time or get sick with malaria that can have very long lasting or permanent effects on their lifetime income, productivity and incomes and there are any number of mechanisms like that and so in the end it's kind of an empirical question, it is a partly empirical question as to whether when we see the countries have redistributed more, which effects have really dominated in the data that's to say have these disincentive effects been so bad or have the resulting positive effects of their lower inequality been overwhelmed that effect. And what we find in the data, we find very little evidence that countries that redistribute more, once you control for inequality now, the countries that redistribute more seem to have worse growth performance. We just don't see it. If all you do is plot on a picture, how much a country redistributes? Against growth over the next five or 10 years. There's no obvious pattern. So it's kind of a simple observation that countries that redistribute more don't seem to grow slower. They don't seem to grow faster particularly or slower. Of course, there's a lot of variation and all our fancy statistics does is try and see does that basic picture hold up when you control for all sorts of things? Does it hold up when you control for initial income? When you control for inequality itself? When you try and use statistical techniques to tease out the direction of causation and things like that. We find it holds up. And so, I think it's a fact or it's a result that people should cause people to think. It doesn't mean those finance ministers should go out and raise taxes tomorrow from whatever they are 25% to 50%. It certainly does not mean that. It means that they should think twice though before assuming that that kind of thing is the wrong way to proceed. I was struck today with the talk by the minister from Brazil about how they've had tremendous success at redistributing and really huge positive results for the standard of living of most of the people in the country for equality and for many social indicators. But that average growth, mean growth has slowed and he was expressing some concern that there is this growth trade off. And what struck me not thinking really about Brazil specifically was the question of whether had they not engaged in that redistributive policy, would they have had a backlash, a political backlash that would have undermined the growth that they have had which after all is positive is not bad. It's not fantastic but it's not bad. And one could imagine had they stayed at that terribly high level of inequality that they had when they started this sort of new policy it might not have been a sustainable growth episode at all which suggests that maybe the trade off isn't as obvious even in that case as some might see it. That doesn't mean they don't need to work on making more efficient their system of redistribution and doing structural reforms that will promote growth. Of course they do but I think it does maybe put that thinking in a slightly different context. Well I would love to have an interesting new paper quicker than three years this time. We are looking at a number of things but I hesitate to say specifically because we have to see what turns out to work. I think that what's one thing we would like to do is work more on the mechanisms, understand better the mechanisms that link equality and growth. In a way our papers leave us with a puzzle. I explain there are many possible mechanisms linking inequality and growth. Some of them we ought to have observed. For example if inequality leads to low investment because of political instability then when you look at the effects of inequality and investment on growth inequality shouldn't matter anymore. If it's working through investment then when you put investment into the relationship that should kind of pick up the effects of inequality. In other words unequal countries should have low investment and therefore that'll be picked up in the investment term. We don't see that. When we put in investment we put in education. We still get an effect of inequality on top of the way it may be working through those variables. So that is a puzzle. Now it could be that the answer is that inequality works in a lot of different ways and it works different ways in different circumstances and so it's kind of hard for it to pick it up with a couple of other variables but it raises questions we want to look at. Another thing I would like to do and we're working on it is to try and look more carefully at country specific contexts and link better inequality and macro policies. We are at the IMF after all and a question that we would like to be able to answer better than we do is about the relationship between not just fiscal policies but policies that have an effect on say the real exchange rate or even monetary policy and distribution and I think the only way to do that really is in a kind of country specific context in which we look at micro data, we look at macro data and we have a kind of theoretical structure that allows us to map them back and forth and we can think about the relationship between macro policies and distribution. That may not be the most important drivers of distribution or of redistribution. Most of it may be longer term structural change and things like that but as the IMF we need to worry about these kind of macroeconomic factors and we've been working on that for a couple of years. We have one or two working papers but it's been hard to make progress because it's basically a hard analytic problem. We've got some support from the UK's Department for International Development that's allowing us to pursue that analytic project over a relatively long horizon. I hope we'll make progress on that. Well, it's been striking to me in the last day of this conference how useful this really is. First of all, we use UN wider data. The world in income inequality database produced by wider is at the base of the data that we use for our work. But beyond that, I took tons of notes today about things we want to pursue as we go home and things we can bring back and try and pursue. I think it's hard to keep up with what's going on around and a conference like this really opens eyes to all the many different features of what's going on. We tend to look at our own little piece. We all tend to look at our own little piece of the puzzle and one thing about this conference that's really striking is on the one hand you have some big picture kind of topics about measurement and the value of global databases and then you have kind of inequality in Rwanda or the role of food price volatility for inequality in Togo or something like that, which is, and I think it's great to get both kinds of all these different kinds of work in one place.