The Unassuming Economist

From Devdiscourse:

“Bangladesh and the World Bank have signed two financing agreements today totaling $900 million to support the country’s transition to green growth, bolster climate resilience, and enhance urban infrastructure. These agreements aim to address Bangladesh’s climate vulnerabilities and promote inclusive development, with a focus on creating sustainable urban infrastructure and improving climate resilience in key sectors.

“We recognize that Bangladesh is among the most vulnerable countries to climate change, and this vulnerability affects both rural and urban communities,” said Abdoulaye Seck, World Bank Country Director for Bangladesh and Bhutan. “This financing will help Bangladesh transition to a greener, more climate-resilient future, supporting development in urban areas while enhancing the country’s preparedness for climate risks. The World Bank remains committed to supporting Bangladesh in achieving its development goals while improving its resilience to climate change.”

$500 Million for Green and Climate Resilient Development

The first agreement, valued at $500 million, is the Second Bangladesh Green and Climate Resilient Development Credit. This financing will support policy reforms aimed at fostering a transition to green, sustainable development across Bangladesh. It will focus on strengthening public planning and financing mechanisms, enhancing the implementation of climate-resilient projects, and promoting the adoption of clean and resource-efficient practices in critical sectors.”

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From a paper by Lorena Škuflić, Dora Walter, and Valentina Vučković:

“Purpose: This paper analyses economic and social impact of fiscal austerity policies on economic growth
and income distribution. In response to the European public debt crisis, austerity measures were implemented in 2010 to decrease the budget deficit and avoid the default of the government debt, but have also caused negative effects on the whole economy.

Methodology: In order to evaluate the effectiveness of fiscal austerity, the synthetic control method (SCM) is applied by creating a synthetic counterfactual from European countries. Greece is used as an example to assess the impact of the aforementioned policy due to having experienced fiscal consolidation to a much larger extent than other crisis-affected countries.

Results: Fiscal austerity causes a decline in real GDP per capita compared to its pre-austerity level. Additionally, it results in higher unemployment and a more unequal distribution of income in the initial years following the treatment.

Conclusion: The objective of fiscal austerity, i.e. the reduction of the debt-to-GDP ratio, is frequently not
achieved due to negative effects of these measures on GDP. Fiscal austerity may occasionally be unavoidable, but even in these cases, deliberate measure-taking is required to prevent the increase in unemployment and income inequality, as witnessed after the global financial crisis.”

From a paper by Kayoko Ishii & Isamu Yamamoto:

“Although the COVID-19 pandemic could have caused both monetary and non-monetary distributional changes, existing studies have only investigated its immediate monetary impacts. This study examines the pandemic’s medium-term impacts on income and well-being inequality using individual longitudinal data from the Japan Household Panel Survey. Gini coefficients and income mobility before and after the pandemic are calculated to analyze income inequality. Various well-being measures such as mental health and life satisfaction are used to analyze well-being inequality. The findings reveal no increase in income inequality. Progressive income growth ensured stable inequality throughout the pandemic. Conversely, on average, well-being worsened, and well-being inequality increased. Furthermore, we find an association between income and well-being inequality. The random-effects and fixed-effects models indicate that the well-being of the high-income group tended to improve, whereas that of the low-income group tended to deteriorate after the outbreak of the pandemic. Additionally, the causal mediation analysis shows that the adoption of remote work served as a factor for the increase in the well-being of people in the high-income group. Remote work became disproportionately prevalent during the pandemic, especially among people in the higher income group. This group experienced various benefits of remote work, which contributed to an improvement in their well-being and an increase in well-being inequality.”

From a paper by Piotr Palac, and Justyna Tomala:

“The relationship between energy commodity prices and inflation has important implications for fiscal
policy and economic stability. The nature of energy commodities ismulti‑ d imensional, serving both as basic raw materials in production processes and as critical consumer goods. This study focuses on estimating the impact of oil, natural gas and coal prices on inflation in Poland. Through the adoption of multiple regression models using quarterly data from Q2 2000 to Q3 2023, the study aims to estimate the impact of energy commodity prices, particularly oil, coal, and natural gas, on inflation in Poland and to answer the research question: What role do energy commodity prices play in shaping inflation in Poland? The empirical analysis revealed that oil and coal prices significantly influence inflation, reflecting Poland’s energy dependency. Natural gas prices showed a limited impact due to lower consumption and mitigation policy measures. The significant impact of energy prices suggests that energy market developments should be closely monitored for their inflationary potential. The study offers valuable insights for policymakers in their efforts to effectively manage inflationary pressure. The article contributes to the literature by presenting the short‑ r un relationship between inflation and energy commodity prices, covering long period of time with both financial, COVID‑19 crisis and the Russian aggression in Ukraine.”

From a paper by Suzana Cvijanović, Ivan Milenković, Vitomir Starčević:

“The paper compares the economic performance of countries that apply the monetary regime of inflation targeting (IT) and countries that apply alternative monetary regimes in the CESEE (Central, Eastern, and Southeastern Europe) region. The paper aims to assess whether the IT monetary regime has contributed to greater positive effects on economic performance in the group of countries that use inflation targeting as a monetary strategy compared to other groups of countries with alternative monetary strategies. The methodology of comparison was applied, namely the statistical technique Difference in Difference (DID), according to Ball and Sheridan (2005) and Goncalves and Salles (2008). After the introduction of IT, there was a fall in inflation rates (but the significance of IT is artificial) and a reduction in the volatility of inflation and gross domestic product (GDP), leading to a stabilisation of economic growth. The results of the analysis indicate that during the period of analysis (1990–2020), there was an improvement in economic performance after the introduction of inflation targeting in the group of countries that use that monetary strategy, but also in other groups of countries. However, the results show that economic performance is a little better in the group of countries that applied inflation targeting as a monetary regime.”