The report reviews recent trends in the global economy and explores the links between income distribution, growth and development.
It notes that global output growth is slowing down, with Europe on the brink of a deep recession. Attempts to overcome the present crisis are dominated by fiscal austerity, combined with wage restraint and in some cases even massive wage reductions. However, these policies are more likely to further weaken growth dynamics and increase unemployment instead of stimulating investment and job creation.
The Report also argues that rising inequality is neither a necessary condition for sound economic growth, nor its natural result. On the contrary, reducing inequality through fiscal and income policies is key for successful and sustained growth and development.