In a new report, Morgan Stanley analyst Carmen Nuzzo discussed the ways inequality can impact the economics of a country and what that means for investors.

In addition, Nuzzo highlights the recent trends in inequality, particularly in developed markets (DMs).

Why Does Inequality Matter?

According to Nuzzo, inequality is not just about income, but includes imbalances based on education, health services, gender, age and race. In the long term, even the wealthiest participants in an economy have a vested interest in a certain degree of widespread income prosperity.

“If the distribution is too uneven with a persistent and widening gap between the top and the bottom of the scale, it prevents broad participation in the welfare gains of growth, and, over time, risks corroding the economic and social fabric of a country,” Nuzzo explained.

Is Inequality Getting Better Or Worse?

While inequality among different countries tends to be globally trending lower, income inequality within many DM countries has been…

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