Research & Insights

Understanding Inequality as a Macro-Financial Risk to Markets and Diversified Portfolios  

In this paper, the Predistribution Initiative (PDI) explores how economic inequality is a macro-financial risk to markets and diversified portfolios. It explains how inequality manifests across people, firms, regions, and capital value chains and traces structural drivers—including financialization, deregulation, monetary policy, market concentration, and traditional corporate governance structures.  Proposals are made for predistributive solutions such as living wages, freedom of association and collective bargaining, grievance mechanisms, employee and community ownership models, and corporate governance reform that better aligns the incentives of investors, investees, and their stakeholders.