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How inequality and low wages can stall growth

Decades of globalisation have raised inequality. Recent research shows that unequal rewards have resulted in lower workers' wages, which reduces aggregate demand, thus slowing growth.

Inequality - arguably the most important global economic issue of our times, blamed for feeding populism, protectionism, anti-migrant and anti-globalisation sentiments around the world - has motivated considerable recent research with analytical significance and policy relevance for Singapore.

One such useful piece of research is the World Inequality Report 2018 produced by a group of researchers, including French economist Thomas Piketty. The report shows income inequality has been rising almost everywhere since 1980.

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A version of this article appeared in the print edition of The Straits Times on July 21, 2018, with the headline 'How inequality and low wages can stall growth'. Print Edition | Subscribe