The Unassuming Economist

From a paper by Luca Agnello & Pietro Pizzuto:

“In this paper we investigate the role of EU Structural and Investment Funds in affecting the dynamic impact of regional fiscal consolidation on regional income inequality. Relying on a panel of 162 NUTS-2 regions of twelve European countries, we find that regional spending cuts increase regional inequality in the medium-term, with the effects surviving to a large battery of robustness checks. The uneven distributional impact of regional austerity measures is however cushioned by larger EU funds expenditures, especially through the European Regional Development Fund (ERDF), with the effect magnified during periods of recession and when the regional quality of government is higher.”

From a paper by Ge Zhai, Maoxin Zhang, Yihua Hu, Yuwei Chen, Cifang Wu, Youpeng Lu, Tingting He:

“Rapid urbanization in China has driven significant economic growth, but the urban-rural economic disparity (URED) continues to widen. This growing disparity impacts domestic productivity, consumer demand, rural stability, and the achievement of common prosperity. To address this issue and promote sustainable development, understanding the spatiotemporal patterns and drivers of URED is essential. This study employs nighttime lighting (NTL) data to analyse URED changes in 36 Chinese metropolitans at three scales. The study results show that: (1) From 2000 and 2022, both the economic volume and area of the study regions grew more than fivefold, but the economic gap between urban and rural areas significantly widened. (2) Economic growth in Predominantly Urban regions has escaped area constraints, while other regions still rely on spatial expansion. (3) URED has shown a steady increase, with higher values in the southeast and lower values in the northwest. (4) Differences in policy implementation and geographic location strongly influence URED. The study confirms the effectiveness of NTL data in capturing urban-rural economic dynamics and the reliability of spatial entropy in measuring URED. Future research will further explore NTL data patterns and integrate additional urban attributes to provide deeper insights into URED.”

From a paper by Frederic S. Mishkin and Michael Kiley:

“Since the initial launch of inflation targeting in the early 1990s in New Zealand and a few other countries, inflation targeting has become the predominant monetary policy strategy in large advanced and emerging market economies. Inflation targeting has been remarkably successful in anchoring inflation, likely owing to core elements of the framework across central banks. Its reaction process, which adjusts the monetary policy stance to ensure the return of inflation to target, allows it to flexibly incorporate a wide range of factors while limiting the discretionary biases that can contribute to excessive inflation. The emphasis on communications about the inflation outlook promotes transparency and accountability. As a result, inflation targeting central banks have, on balance, managed well the large shocks associated with the Global Financial Crisis and COVID. Even so, there are numerous challenges discussed in this paper that are associated with calibration and communications of forward guidance, quantitative easing/tightening, and financial stability.”

From a paper by Joan Crespo & Jesús Peiró-Palomino:

“This article studies the dynamics of innovation in the US Core-Based Statistical Areas over a long period (1860–2019), with the production of patents used as a proxy for innovation. The results show that innovation has always been highly concentrated, albeit with alternating periods of greater and lesser concentration. Despite the relative stability of the distribution of innovation, cities have experienced notable movements inside the distribution, which are the result of progressive long-run tendencies. Moreover, a remarkable change in the innovation landscape is found due to cities in the Northwest and Midwest gradually losing ground to cities in the South and the West. Finally, the technological specialization of cities changes rapidly, and the technological life cycle phase conditions cities’ mobility within the innovation distribution. Specialization in growing technologies helps cities to improve their relative position in the distribution, while the opposite is the case for cities that specialize in mature technologies.”

From a paper by Johnson Worlanyo Ahiadorme:

“The question of the implication of the macroeconomic policy environment for welfare may be an empirical one, and the answer may well differ amongst economies. In this paper, we evaluate the role of monetary policy toward inclusive growth. The evidence from a large sample of countries shows that in both the short and long terms, low inflation and stable economic growth are associated with lower income inequality, improved well-being of the poor and greater inclusion. Both short-term and long-run effects are statistically significant and show that monetary policy that aims at low inflation and stable economic growth is most likely to improve permanently growth inclusiveness and the conditions of the poor. However, in advanced economies where inflation rates are considerably lower, disinflation hurts the poor and equity, ignites greater unemployment cost, and worsens growth inclusiveness. In any case, price and output stability is necessary for greater growth inclusiveness. Thus, the twin objectives of macroeconomic stability and inclusive growth offer no trade-offs.”