The Unassuming Economist

From a paper by Remi Jedwab, Elena Ianchovichina, and Federico Haslop:

“Census data for 7000 cities – three fourth of the world’s urban population – reveal that cities of the same population size in countries with similar development levels differ substantially in terms of their employment composition, especially in the developing world. Using these data, we classify cities into production cities with high employment shares of urban tradables (e.g., manufacturing or business services), consumption cities with high employment shares of urban non-tradables (e.g., retail and personal services), or neutral cities with a balanced mix of urban tradables and non-tradables. After establishing stylized facts regarding the sectoral distribution of employment in our global sample of cities, we discuss the various paths by which developing nations may urbanize through production cities – via industrialization or tradable services – or consumption cities – via resource exports, agricultural exports, or deindustrialization. Country and city-level data corroborate our hypotheses. Results on the construction of very tall buildings also provide suggestive evidence on the relationship between resource exports and consumption cities. Importantly, consumption cities seem to present lower growth opportunities than production cities, diminishing the role of cities as “engines of growth.” Understanding how sectoral structure mediates the urbanization-growth relationship and how consumption cities become production cites is thus highly relevant for policy.”

From a paper by Patrice Ollivaud and Cyrille Schwellnus:

“Productivity growth in most advanced economies has slowed significantly over the past five decades. The negative impact on real wage growth has been amplified by declines in labour income shares, which have been particularly pronounced during the period 1983-2007. This chapter analyses labour share developments using a combination of country, industry and firm-level data. Technological change in the investment goods-producing sector and greater global value chain participation have tended to compress labour shares, but the effects have been significantly less pronounced in Japan and most European countries than in the United States. Firm-level evidence suggests that declines in labour shares reflect technological dynamism rather than anti-competitive forces. Policies that raise human capital through education and training play a crucial role to broaden the sharing of productivity gains by ensuring that workers can make the most of ongoing technological advances.”

From a paper by Theo Eicher, Reina Kawai Eskimez, and Monique Newiak:

“Crises often require economic consolidations that may unevenly affect different segments of the population. Some crisis countries enter financial arrangements with the IMF and adopt adjustment programs, and studies have associated program conditionality with negative impacts on gender inequality. Proper evaluations of the impacts of IMF-supported programs on gender inequality require, however, credible control groups that address the counterfactual: do post-crisis gender disparities evolve differently without an IMF-supported program? We examine over 150 IMF-supported programs (1994-2022) using custom-tailored control groups that match each IMF-supported program country’s gender and economic trends and find overwhelming evidence against systematic impacts of IMF-supported programs on gender equality.”

From a paper by Weizhuojia Peng, Weibai Liu, Yijia Li:

“This paper examines the impact of financial development on pollution reduction at the enterprise level using statistical data from 30 provinces in China from the period 2018 to 2022. The effect of financial development on pollution reduction is examined separately from the perspectives of scale effect and technology effect. Although there are significant regional differences in the impact of the increased use of financial instruments on pollution reduction in different provinces of China, on balance the greater use of financial tools decreases pollution, reflecting the technological effect of utilizing financial tools exceeds the scale effect. Heterogeneity analysis shows that the impact of financial development on pollution reduction of private enterprises is higher than that of state-owned enterprises. The paper also discusses the implications for China in achieving carbon peak and carbon neutrality and promoting high-quality economic development and an economic green transformation. Since improvement in the financial system is a key to improving the environment, the increased efficiency of financial tools enhances this improvement.”

From a paper by Asiye Öznur Ümit and Sinem Eyüboğlu:

“This research examines effects of financial development, economic growth, government
expenditures, urbanization, and trade openness on income inequality in the leading emerging economies
of the G-20 (Argentina, Brazil, China, India, Indonesia, Mexico, Russia, and Turkiye) for the period from
1989 to 2021. The findings confirm the existence of a cointegration nexus among the variables over the
long-term. According to the common correlated effects mean group estimator, financial development has
negative effects on income inequality in the panel. Factors such as government expenditures and trade
openness demonstrate positive effects on income inequality. In the country-specific effects, we find that
the impact of financial development on income inequality is negative and statistically significant in
Argentina, India, and Russia. The influence of economic growth on income inequality is positive and
significant in Indonesia, Mexico, and Turkiye. Government expenditures on income inequality appear to
be positive in Argentina, Indonesia, and Mexico. Finally, trade openness demonstrates a positive and
significant effect in India, Indonesia, Mexico, and Turkiye. Among the reasons for the differences in test
results across countries are variations in their political structures, particularly the high inflation and
macroeconomic instability in Turkey, the presence of the informal economy and corruption in Brazil,
Indonesia, Turkey, and China, as well as regional inequalities. In this context, based on the overall panel
test results, it is recommended that policymakers increase financial inclusion, reduce regional disparities,
reduce corruption, increase social assistance, and balanced trade policy to enhance the impact of financial
development on income distribution”