Globalization, technology driving income disparity: BoC
Published Monday, March 12, 2012 9:20PM EDT
OTTAWA - The Bank of Canada's second in command says globalization, along with technological change, has been a major driver of rising inequality within countries.
The banks' senior deputy governor Tiff Macklem says the market forces unleashed by globalization has decreased global inequality, but ironically increased it within countries.
He says the phenomenon is not temporary and that governments need to address the issue.
Central bankers can mitigate against income disparity by keeping inflation low and stable and protecting the financial system.
Macklem told a business audience in Brazil that increases in inflation hurt the poor more than the rich.
And he says the bank's own study shows that new rules to reduce risks in the banking sector will be a net benefit to economies in Canada and around the world.