Princeton University economist Angus Deaton, winner of this year’s Nobel Prize in economics, called for a deeper debate on income inequality heading into the presidential campaign.

“People on left have to better understand what are the benefits of inequality and people on right have to understand better what the dangers are….It has to become properly hardwired into the American democratic debate in a way that it hasn’t really been,” he said at The Wall Street Journal CEO Council annual meeting.

Mr. Deaton noted the incentives generated by inequality but also potential corrosive effects.

“Inequality is partly a marker of success,” he said. “If someone thinks of something, some new innovation that benefits us all, and the market works properly, they get richly rewarded for that and that’s just terrific and that creates inequality. So some of the greatest inequalities in the world have come from the greatest successes—from the industrial revolution 250 years ago to innovation and new inventions and new things today.”

But the downsides include a potential misallocation of resources and political favoritism for the wealthy.