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Fair and Inclusive Markets: Why Dynamism Matters

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  • Reda Cherif
  • Fuad Hasanov

Abstract

We show empirical evidence that there may not be a tradeoff between market income inequality and high sustained growth, which is key for poverty alleviation. We argue that the economies that achieved high sustained growth and low market income inequality are characterized by dynamism—a drive toward sophisticated export industries, innovation, and creative destruction and a high level of competition. What a country produces and how much it competes domestically and internationally are important for achieving fair and inclusive markets. We explore policy options to steer industrial and market structures toward providing growth opportunities for both workers and firms.

Suggested Citation

  • Reda Cherif & Fuad Hasanov, 2021. "Fair and Inclusive Markets: Why Dynamism Matters," IMF Working Papers 2021/029, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/029
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    2. Theodora Sotiropoulou & Stefanos Giakoumatos & Antonios Georgopoulos, 2023. "Financial development, economic growth, and income inequality: a Toda-Yamamoto panel causality test," Economics and Business Letters, Oviedo University Press, vol. 12(2), pages 172-185.

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    Keywords

    Inequality; creative destruction; market power; industrial policy; sophistication; innovation; manufacturing; WP; monopsony power; panel data; supply firm; laggard firm; technology company;
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