This research project explores the links between technological change, productivity, and income distribution. It is motivated by two mega trends of our times: slowing productivity growth and rising income inequality. Together, they produce weaker and less inclusive growth in incomes and living standards, and also contribute to societal woes and political divisiveness. While technology seems to be booming, led by the digital revolution, productivity growth has slowed in major economies. Concurrently, income inequality has risen. What explains the paradox of slowing productivity amid advancing technology? What are the factors behind the rise in income inequality? Are the trends of slowing productivity and rising inequality interconnected? How should policy respond?
The project addresses these questions by analyzing macroeconomic and firm-level evidence and synthesizing relevant research. It focuses in particular on whether there are common drivers of the slowdown in productivity and rise in inequality. A core area of analysis is technological change and its interaction with market conditions as influenced by policies. The project aims to draw implications for national policy reforms and international cooperation to achieve economic growth that is more robust and more inclusive.
The project is a joint effort of the Global Economy and Development program at Brookings and the Chumir Foundation for Ethics in Leadership. It consists of a series of research outputs and events, including papers, briefs, blogs, and workshops. A final project volume will be published around mid-2018, at which time a conference and other dissemination events are planned.