institution he led. After a period of internal discussion, the Bank adopted Twin Goals that were to guide all of its work. The first of these goals was the “elimination” of extreme poverty, understood as driving the proportion of people living below the international poverty line under 3% by 2030, and it was agreed upon relatively easily. There was much more discussion about the second target. Those within the Bank who resented the focus on poverty as excessively narrow, wanted a second goal that was about growth and prosperity more generally. Those who wanted to preserve a focus on the under-privileged insisted that that prosperity had to be adequately shared. A concern with inequality featured prominently in these discussions, which ultimately led to the adoption of the growth rate in the average income among the poorest 40% of any country as the metric by which “shared prosperity” should be monitored. The choice of that metric owed much to the new Bank Chief Economist, Kaushik Basu, who had proposed something similar much earlier, in Basu (2000). Though, as we have seen above, very similar ideas had also been floated at the World Bank some forty years earlier.

The period that followed the WDR 2006 also saw a substantial increase in the profile of inequality in research conducted at the IMF.<sup>30</sup> In keeping with the Fund’s macroeconomic mandate and expertise, the main focus of that research was on the (long-debated) relationship between inequality and growth. In particular, Berg et al. (2012) found evidence that higher inequality was associated with shorter, less persistent growth spells in a large panel of countries. Ostry et al (2014) went further and claimed that lower inequality in net incomes was associated with faster and more durable growth, controlling for the level of redistribution, and that there was no evidence that redistribution was bad for growth, unless it was extreme. Although the second paper has been the subject of some convincing criticism,<sup>31</sup> the research has been undoubtedly influential, both in terms of academic citations and on the public debate. At least in part, that impact reflects the fact that the IMF had been previously widely perceived as being impervious to concerns about distribution, so that its findings that inequality can harm growth, and that redistribution need not, have caused as much surprise for their authorship as for any other reason.

But there is no doubt that the work by Andrew Berg, Jonathan Ostry and collaborators has marked a real change in the IMF’s perception of inequality as a legitimate field of inquiry, given its pertinence to macroeconomic issues such as the level and sustainability of growth. Figure 2 below plots the combined word count for the words “equality” and “inequality” in IMF documents from 1946 to 2021, both in absolute and relative terms. Analogously to Figure 1, the upper panel depicts the series for the absolute number of words, while the lower panel plots the series for the relative frequency of those words. Both series are five-year moving averages. They draw on 48,616 documents downloaded from the IMF eLibrary, between July-September 2021. The lower panel shows an tenfold increase in the inequality “word-share” for IMF documents, from less than 0.01% in 2011 to approximately 0.08% of all words in 2021. This compares with a previous peak of 0.02% in 2000. It would seem that, at least in terms of the word count metric, attention to inequality at the IMF has been clearly and unambiguously on the rise, in contrast to a more cyclical pattern at the World Bank. Much as in the case of the World Bank, IMF research staff were responding to the rising profile of inequality in the academic literature (and, perhaps, at the World Bank),

> 30 Important precursors included work on changes in inequality during the economic transition from socialism, e.g., Keane and Prasad (1999).

> 31 Critics have argued that it is based on a problematic data set (Jenkins, 2015) and suffers from methodological problems (see Kraay, 2015).

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