The Unassuming Economist

From the World Economic Forum:

“Imagine a city in Asia and the Pacific, in 2030, where sustainability flourishes, public services are accessible to all, and green spaces abound amid bustling urban life. In several cities across the region, local governments are moving towards achieving such a vision, but progress is slow.

But time is of the essence, and the cities of tomorrow will be shaped by decisions made today. The building of resilient, equitable and sustainable urban environments requires a new type of city leadership that champions a transformative approach that goes way beyond traditional urban management.

In today’s world, cities account for more than 70% of global carbon dioxide (CO2) emissions, mainly from transportation and buildings. By 2050, rapid urbanization will add 1.2 billion people to cities in Asia and the Pacific, putting immense pressure on already strained infrastructure and services, compounded by the impacts of climate change.

Without rapid transformation, many cities in Asia Pacific will see rising inequalities and be even more vulnerable to climate-induced disasters.

Six of the 10 countries most affected by climate-related events over the past two decades lie in Asia and the Pacific, compounding to the vulnerability of some of the growing cities. This unfolds as many of them already struggle to provide basic services like clean water, affordable housing and reliable energy for their growing populations.”

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From a paper by Ahmed Hefnaoui and Ibnouzahir Youssef:

“This study assesses the effectiveness of Morocco’s monetary policy following the adoption of inflation targeting in 2006. The objective is to evaluate whether this strategy has stabilized inflation and supported economic growth. The methodology is based on a VAR model using quarterly data from 2007 to 2023, with Granger causality tests and impulse response functions to capture the simultaneous effects between monetary variables. The results indicate that inflation in Morocco is driven by shocks to the exchange rate and money supply, while the effect of the policy rate remains limited. Although monetary interventions have short-term effectiveness, their moderate impact suggests the need for structural reforms to enhance inflation targeting efficiency.”

From a paper by Tibor Rutar:

“High or rising economic inequality can exacerbate political inequalities and is plausibly linked with some
social harms, such as health problems and declines in happiness and trust. Within-country income inequality increased sharply across most of the world since the 1980s. One prominent critical sociological account of this occurrence points toward institutions of free-market capitalism, or “neoliberalism,” as a key cause that unleashed inequality during the globalization age. This article empirically operationalizes free-market institutions with the use of Fraser Institute’s index of economic freedom and examines the issue with fixed-effects regressions in a novel dataset of 130 countries between the years 2000 and 2021. It finds a substantial positive correlation between the two variables in the developing, though not the developed, world. This finding is robust to a variety of alternative specifications. Moreover, across specifications, modest size of government and freedom of international trade stand out as the two clear components of economic freedom driving the aggregate relationship. Finally, mediation analysis suggests there also exists an indirect ameliorative relationship between economic freedom and inequality through the conduit of economic development.”

From a paper by Prakash Loungani, Hites Ahir, and Akos Mate:

“This chapter examines the International Monetary Fund (IMF)’s approach to labor markets and policy recommendations between the Global Financial Crisis (GFC) and the COVID-19 pandemic. It explores the contrasting positions of neoliberal and progressive perspectives on labor market efficiency and equity, as well as their attitudes toward globalization. The chapter analyzes the IMF’s advice on labor market flexibility, fiscal policy, and macroeconomic policies. It also discusses the reactions to the IMF’s work from progressive circles. The chapter provides insights into the IMF’s efforts to balance efficiency and equity considerations, particularly in advanced economies and emerging markets. Additionally, it explores the IMF’s work on distributional outcomes and its response to the COVID-19 pandemic’s impact on labor markets.”

From a paper by John Thornton, and Chrysovalantis Vasilakis:

“This paper examines the effect of inflation targeting (IT) on income distribution in a panel of 70 countries. Employing panel regressions and a variety of propensity score matching methods, we find strong evidence that incomes became more unequal in IT-adopting countries relative to countries that did not adopt IT. Panel regressions suggest that Gini coefficients increased by 0.25%–0.57% and the share of income of the top 1% and 10% of households increased by 0.7% in IT adopter countries. Using propensity score matching methods, IT has been associated with a relative rise in Gini coefficients of about 1–2 percentage points, and a relative increase in the share of national income going to the top 1% and 10% of households by about 11–13 percentage points and 13–17 percentage points, respectively. The results are robust to changes in country sample and alternative estimation methodologies.”