Inequality and the role of central banks were key points of discussion as Professor Atif Mian, Professor of Economics, Public Policy and Finance at Princeton University delivered the 29th Henry Thornton Lecture – hosted by the Centre for Banking Research at Bayes Business School (formerly Cass).
The Lecture, inaugurated in 1979 and named after the 19th Century economist and British monetary system expert, is delivered by leading academics from the field of finance and monetary theory.
Professor Mian’s lecture centred around his co-authored research into indebted demand. As part of this research, he argues the case for revised macroeconomic models to incorporate inequality as a major dynamic, as well as the implementation of progressive taxes, public investment and greater market competition.
Professor Mian spoke about the dangers of an ‘indebted demand cycle’, whereby as the richest increasingly save, the poor must borrow more and accrue further debt – leading to lower interest rates and further inequality. He used his lecture to explore possible ways that states could reverse the cycle.
Following the lecture, Professor Mian took questions from Professor Vasso Ioannidou, Professor of Finance at Bayes, and members of the audience.
On delivering the lecture, Professor Mian said:
“It was a great honour to deliver an important lecture.
“At such a difficult time for global economies still reeling from the pandemic, coupled with the effects of war in Ukraine, increasing inequality poses a very serious problem for financial systems.
“Governments need to take actions, including public investment and more progressive taxation, to deliver a more equitable distribution of economic prosperity that will then lead to a more balanced macroeconomic system.”
Professor Ioannidou said:
“Professor Mian’s lecture was very timely, given the cost of living crisis that the UK currently finds itself in.
“Now more than ever, we need to find ways of easing liquidity to alleviate downward pressure on interest rates – which threatens to increase debt and further widen the gap between rich and poor.”
Professor Barbara Casu, Director of the Centre for Banking Research, said:
“The Henry Thornton Lecture was set up to provide expert academic thinking into monetary systems and policy.
“Professor Mian’s presentation provides great scope for us in the Centre for Banking Research, and our work into how economic and business problems affect the banking and financial sectors.
“We thank Professor Mian for coming to Bayes to deliver this very special lecture.”