Authorization

IMF's Lagarde warns of the middle class crisis in Davos

IMF's Lagarde warns of the middle class crisis in DavosInternational Monetary Fund Managing Director Christine Lagarde called for greater wealth distribution to respond to populist advances across the world, while hedge fund billionaire Ray Dalio predicted the possible end of globalization, Bloomberg said on Wednesday.

In a World Economic Forum in Davos debate entitled Squeezed and Angry: How to Fix the Middle-Class Crisis, Lagarde said the middle class had shrunk in Western economies.

“With lower growth, more inequality and much more transparency, I think you have the good ingredients of what is defined now as a crisis of the middle class in the advanced economies,” she said.

Policy makers “really have to think it through and see what can be done” given the feedback from voters who say "No," Lagarde told a panel at the World Economic Forum on Wednesday. Among measures that could be implemented are fiscal and structural reforms, she said.

“But it needs to be granular, it needs to be regional, it needs to be focused on what will people get out of it and it probably means more redistribution than we have in place at the moment,” Lagarde told the panel.

Excessive inequalities were a brake on sustainable growth, she said.

How to address the economic and political fallout from the anti-establishment forces that manifested themselves in the U.S. election and Brexit has been a key theme of the Davos gathering. In Europe, elections are due this year in the Netherlands, France and Germany, with a possible early poll in Italy following a constitutional referendum in the country where voters rallied against the government.

The panel saw Dalio, founder of Bridgewater Associates, struck a more pessimistic tone than Lagarde.

“I want to be loud and clear: populism scares me,” Dalio said.

“We may be at a point where globalization is ending, and provincialization and nationalization is taking hold. The No. 1 issue economically as a market participant is how populism manifests itself over the next year or two,” he added.

The panel also discussed how to combat the backlash against governments and the elite by taking back control of the political narrative.
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«    Декабрь 2018    »
ПнВтСрЧтПтСбВс
 12
3456789
10111213141516
17181920212223
24252627282930
31