So, Ms, Lagarde points out that inclusive growth is important. People need to buy into the idea that all are becoming better off.
So, what can be done? The answer is not for policymakers to hold off on reforms that boost productivity and growth. Rather, policymakers should consider options that make these reforms more palatable from both a growth and distributional perspective.
With this in mind, our staff paper looks at a number of country cases and analyzes how well-targeted measures can complement reforms and offset adverse distributional impact.
So, for example, Malawian maize subsidies are grossly distorting, get rid of them. But part of that positive sum gain might be paid out to poor farmers as a basic income, say.
Awight then. And Ritchie tells us that the takeaway here is as follows:
The argument is clear.
First austerity does not work.
Second, trickle down does not work.
Third, what you promote as a mechanism for growth matters: not all growth is equal and much is inequality inducing.
Fourth, what matters most of all then is growth aimed at reducing inequality. Nothing else is sustainable.
Absolutely none of which is actually said by the IMF nor Ms. Lagarde.
What they are actually saying is go gung ho for growth but spread the benefits around a bit. And they most certainly do not say that inequality increasing growth is unsustainable. They have, after all, heard of the Kuznets Curve, something our professor of practice in international political economy seems blissfully unaware of. A curve which two of the countries the IMF mentions, Malawi and Ethiopia, are undoubtedly on the wrong side of currently, inequality-wise.
Or, the TL:DR version – he’s making shit up again.