Greenspan: Low Inflation Necessary
WASHINGTON (AP) _ Closing the gap between America’s rich and poor starts with keeping inflation under control, Federal Reserve Chairman Alan Greenspan said Friday.
There must be stable prices contributing to long-term economic growth in order to ``lift living standards as broadly as possible,″ Greenspan told a gathering of Federal Reserve officials in Jackson Hole, Wyo.
The text of the speech was made available in Washington.
Greenspan cited Fed statistics showing that a gap in wealth between the rich and poor has persisted throughout the nation’s booming economic growth in the 1990s.
For example, although lower-income households are more likely to be stock-market investors today than a decade ago, Greenspan said, the share of stock and mutual fund assets owned by the poorest 90 percent of families did not rise between 1992 and 1995.
However, Greenspan noted that the distribution of ownership of certain household goods associated with a high standard of living _ such as dishwashers, clothes dryers, microwaves and motor vehicles _ has become more equal.
``We need to ask ... whether we should be concerned with the degree of income inequality if all groups are experiencing relatively rapid gains in their real incomes, though those rates of gain may differ,″ Greenspan said.
In his prepared remarks, Greenspan made no mention of the financial crises wracking Asia and Russia, or of plummeting stocks this week on Wall Street.
But his office confirmed Friday that he will join Treasury Secretary Robert Rubin at his first meeting with Japan’s new Finance Minister Kiichi Miyazawa. That is scheduled for Sept. 4 in San Francisco.