The Unassuming Economist

From a paper by Robert Holzmann:

“After the global financial crisis and until 2021, the primary objective of central banks in advanced economies was to implement policies aimed at increasing inflation, given that inflation had been too low for too long. Having reached the effective lower bound (ELB) of nominal interest rates, monetary policy had to resort to unconventional monetary policy (UMP) measures, which were not without negative side effects. In response to the rise in inflation in 2021, central banks returned to policy interest rates as their primary monetary policy tool and began to unwind their set of UMP measures. Assuming that inflation has been tamed, will we be able to maintain sufficient distance from the ELB to rely broadly on policy rates? Or will we again be forced to implement UMP with all its side effects and proportionality issues? Part I of the paper outlines the rationale and instruments of UMP: how it was supposed to work and how it actually worked, including its negative side effects. Part II considers alternative monetary policy options in a low inflation environment that prove limited and little convincing. The paper ends by discussing how prolonged use of UMP impacts on central bank profitability and central bank independence, also offering possible remedies.”

From a paper by Shrimoyee Ganguly and Rajat Acharyya:

“Interest rate hike as an instrument for inflation-targeting has been adopted quite aggressively in recent times by the Fed Bank of the United States, which has some far-reaching implications for emerging market economies like India. In such a context, this article explores implications of interest rate hike by a large foreign country for wage inequality between skilled and unskilled workers in a domestic economy. We focus on the supply side channel: hike in foreign interest rate affecting wage inequality through its impact on domestic investment, capital formation and consequent changes in the composition of aggregate output. We show that the wage inequality worsens if capital-cost share in a composite traded good is larger than the capital-cost share in a skill-based export-good Z. Domestic policies such as credit expansion by changing the cash-reserve ratio and increase in money supply help mitigate this worsening wage-inequality effect of interest hike abroad. This issue assumes relevance because of rising concerns among the major central banks the world over about the income distributional impacts of monetary policies, whereas most of the recent income inequality trends seem to have been contributed largely by rising skill premiums.”

From ET Edge Insights:

“India’s Industrial Park development is an important driver of economic development, but its importance goes beyond financial growth. It can change the urban environment to be a sustainable, resilient, and inclusive ecosystem, directly contributing to SDG 11: Sustainable Cities and Communities. Embedding sustainability, smart planning, and green practices, industrial parks can harmonize industrial activity with urban well-being.

Urban growth through planned industrial parks

One of the key means by which industrial parks help support SDG 11 is planned urbanization. Aggregating industries prevents it from all haphazard sprawls and prevents much stress on the built-up infrastructure of a city or town. For instance, the Dahej PCPIR region located in the state of Gujarat covers nearly 450 square kilometres that have been well planned into an industrial cluster to keep maximum use of the land on the one hand, which would cause minimum displacement on the lands adjacent to the industry cluster.

Industrial Park integrates urban planning by providing residential zones, green spaces, and the services to be provided for workers. This planned approach goes along with SDG 11.3 and is dedicated to sustainable urbanization, in which participatory planning aims for harmonious coexistence between the industrial and the urban.

Inclusive growth and social development

An Industrial Park is more than just industries – it’s an ecosystem. This will foster inclusive development; these entities will actually be producing jobs, developing entrepreneurs, and upgrading living standards within a region.

Furthermore, Industrial Parks generally trigger the growth of supportive infrastructures like schools, hospitals, and houses. Industrial parks have witnessed the establishment of educational and health facilities for the benefit of the local people. The infrastructure developments support SDG 11.1 by giving access to basic and affordable housing and services.”

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From a paper by Ted Schrecker:

“‘Polycrisis’ (1) has a good claim to status as the word of the decade, in a world beset by such phenomena as the fallout from the worst pandemic in a century; heightened geopolitical uncertainty and its economic impacts; and human-induced climate change and other disturbing manifestations of the Anthropocene Epoch. Yet another crisis, rising inequality, has drawn relatively less attention, although it compromises or eliminates the chances for large segments of the population to lead healthy lives.

In 2014, the then-managing director (CEO) of the International Monetary Fund (IMF) described the growth in inequality worldwide as ‘staggering’ and warned that ‘[i]f we are not careful, the ghosts of the 19th century will haunt the 21st century’ (2). Although the organization she led had over the decades done much to contribute to that pattern, she was correct, and the subsequent decade provided abundant evidence that the haunting she anticipated is already happening (3, chapter 3; 4).

Health promotion research and practice have yet to adequately take on board the consequences of this pattern. Concepts like health literacy that presume individuals have the material resources needed to lead a healthy life are of limited relevance, to put it politely, to populations like:

- The 2.8 billion of the world’s people who could not afford a healthy diet in 2022, according to the United Nations agency with responsibility for food security (5, p. xix);

- The 3.8 million people in the United Kingdom (UK) who experienced destitution, ‘where people cannot afford to meet their most basic physical needs to stay warm, dry, clean and fed’ (6) in 2022, up from 1.55 million in 2017 (7);

- The estimated 800,000 United States (US) urban residents who lacked a piped water connection between 2013 and 2017 (8), after cost increases associated with a decade of privatization and austerity.”

From the World Bank:

“A new World Bank report highlights Kazakhstan’s progress in reducing poverty and the challenges ahead for inclusive growth, stressing that the pace of poverty reduction has slowed in recent years despite significant advances since the early 2000s. According to the “Kazakhstan Poverty and Equity Assessment 2024” report, making fiscal policy more pro-poor, improving the quality of education, and strengthening climate resilience are critical priorities for policymakers in order to reduce poverty and inequality in Kazakhstan.

Kazakhstan’s economy has grown robustly since 2006, with an average annual growth rate of 4.7 percent. This growth has increased incomes and living standards, transitioning the country to upper-middle-income status. These gains lifted 5.9 million people out of poverty, reducing the poverty rate from 49.5 percent to 8.5 percent in the same period.

“Between 2006 and 2021, economic advancement significantly improved living standards and reduced poverty rates in Kazakhstan. Economic growth has slowed since 2014, and the pace of poverty reduction has fallen. The COVID-19 pandemic exacerbated these challenges, highlighting the need for resilient and inclusive economic strategies presented in this report,” said Andrei Mikhnev, World Bank Country Manager for Kazakhstan.“

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