The Unassuming Economist

From a paper by Vicente Ferreira, Alexandre Abreu, and Francisco Louçã:

“Over the period of 2021–2024, inflation has resurged and then retreated in most industrialized countries. Economists were divided into two main camps: team transitory, which argued that inflationary pressures were primarily cost-push and would tend to fade away as supply disruptions eased, and team permanent, which viewed it as a predominantly demand-pull process and warned about the risks of persistent second-round effects associated with an overheated labor market. This paper covers this theoretical debate on the origins of inflation and contrasts it to the available empirical evidence for the Euro Area, laying out several inconsistencies in the New Keynesian argument proposed by team permanent. Since that was, nevertheless, the predominant interpretation among central bankers, including the ECB, this paper also discusses the impacts of monetary policy decisions informed by the New Keynesian view, arguing that there is good reason to believe that it has had regressive consequences in terms of the functional distribution of income as well as differentiated impacts across Euro Area core and periphery countries.”

From The Economic Times:

“India Inc Friday condoled the passing away of former Prime Minister Manmohan Singh, saying he had conceptualised India’s resurgence with pathbreaking reforms across all areas of the economy.

The Federation of Indian Chambers of Commerce and Industry (FICCI) termed Singh as the architect of India’s economic liberalisation and the father of economic reforms, recognising his contribution to introducing the Liberalisation, Privatisation and Globalisation (LPG) reforms in 1991.

“With his visionary leadership, he set India on a new journey of growth, all-round development and global engagement. Alwa ..

Under his leadership as finance minister and later as prime minister, India witnessed unprecedented economic growth and emerged as a global economic powerhouse, FICCI said in a statement.

“His visionary policies and unwavering commitment to inclusive growth have left an indelible mark on India’s economic landscape,” it said.”

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From Devdiscourse:

“The World Bank Group Scorecard FY24, published by the World Bank Group, offers a comprehensive plan to tackle today’s most critical global challenges. From addressing poverty and inequality to combating climate change and strengthening infrastructure, the report serves as a key guide for achieving sustainable growth and shared prosperity. It highlights the institution’s role in fostering global resilience amid ongoing economic uncertainties, pandemics, and geopolitical shifts.

A Renewed Focus on Poverty Eradication and Shared Prosperity

The World Bank Group continues to lead global efforts to eradicate extreme poverty and promote equitable economic opportunities. Aligning its strategies with the Sustainable Development Goals (SDGs), the Scorecard underscores the importance of fostering inclusive growth.

The report highlights the growing urgency to address systemic inequalities while building robust safety nets for the most vulnerable populations. These measures are critical for achieving stability and equitable access to education, healthcare, and economic resources, ensuring that no one is left behind.”

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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.”