Central Banks Channel Piketty Inequality Concerns, Nowotny Says

Inequality is becoming a factor in monetary policy as central bankers increasingly realize it can cause financial instability they’ll have to fix, European Central Bank Governing Council member Ewald Nowotny said.

Imbalanced income and wealth distribution, a rising topic of global debate following publication of Thomas Piketty’s book “Capital in the 21st Century,” was one of the main causes for the U.S. subprime-debt crisis, Nowotny told reporters in Vienna yesterday. Society’s inability to address the rising inequality has thrust the issue into monetary-policy debates, he said in reply to a question about his view of Piketty’s book.