Apparently, the issue of rising unequal income distribution is neither new, nor the world has been shielded from tectonic changes in the systems, such as for example the transition in Europe, which was “fertile soil” for rising inequality. However, it is only in the last ten years that we witnessed such substantial proliferation of literature, and academic and political debates on the roots and consequences of rising income inequality. It was the financial crisis that brought the issue to the fore. Even more, some authors link the severity of the financial crisis and its unexpected spell, exactly to the uneven societies. In his book “Fault Lines”, Raghuram Rajan argued that rising inequality in the past three decades led to political pressure for redistribution that eventually came in the form of subsidized housing finance, which was at the root of the global crisis. Whether or not policies of the central bank affect the income distribution gained lots of attention, as well. I would say that the pure fact that we inherently face with heterogeneity across households in terms of their primary sources of income – capital or labor – or with respect to their position of being saver, or borrower naturally implies that monetary impact, at least in the short-term, could differ along these groups. Macro-prudential measures, by design are targeted and selectively used to tackle identified points of vulnerability. Purchase of different types of assets, also significantly alters the pricing on the financial markets and can have different wealth effects.

Still, given the rationale and the features of central banking policies, as Ben Bernanke (2015) states: “By comparison to the influence of (these) long-term factors, the effects of monetary policy on inequality are almost certainly modest and transient”. These long-term factors influencing inequality relate to globalization, technological progress, demographic trends, and institutional changes in the labor market. How should we tackle the chronic problem of uneven income distribution, which seems a symptom of many fundamental weaknesses of the system? How to return the greatness of the opportunities that modern society should bring? Should the way forward be stronger regulation, more active redistributive role of the state or as Prof. Zingales claims through harnessing the power of competition? As economists, we all know that market based system inherently brings some inequality, but its disruptive power is unthinkable when boundaries are crossed. At the current juncture, when global growth slowdown is on the horizon pro–growth and pro–equality policies seems inevitable. I am sure that distinguished speakers and panelists will reflect on the array of available policies, including improving access to markets and levelling the playing field, increasing financial inclusion, investing in human capital, regulatory and institutional reforms, that strengthen the rule of law and promote competitive and fair business environments. We, as policymakers, cannot only have the role of “innocent bystanders”, scrutinizing and stocktaking, but putting in place reforms that promote strong and inclusive growth that by its nature reduces inequality.