Three International Monetary Fund economists show that the increase in inequality has been a political choice-and explain what policies we should choose instead to achieve a more inclusive economy. Confronting Inequality is a rigorous and empirically rich book that is crucial for a time when many fear a new Gilded Age.

Inequality has drastically increased in many countries around the globe over the past three decades. The widening gap between the very rich and everyone else is often portrayed as an unexpected outcome or as the tradeoff we must accept to achieve economic growth. In this book, three International Monetary Fund economists show that this increase in inequality has in fact been a political choice--and explain what policies we should choose instead to achieve a more inclusive economy. Jonathan D. Ostry, Prakash Loungani, and Andrew Berg demonstrate that the extent of inequality depends on the policies governments choose--such as whether to let capital move unhindered across national boundaries, how much austerity to impose, and how much to deregulate markets. While these policies do often confer growth benefits, they have also been responsible for much of the increase in inequality. The book also shows that inequality leads to weaker economic performance and proposes alternative policies capable of delivering more inclusive growth.

Confronting Inequality is a valuable primer on one of the central issues of the present day. Ostry, Loungani, and Berg make a powerful argument that inequality has economic, social, and political effects that slow economic growth-and they suggest a menu of sensible policies to make the world a better, fairer, and more prosperous place. A cogent and concise summary of what we know about inequality and about how to reduce it.