The Unassuming Economist

Source: Financial Times

“Territorial inequality of productivity is the core problem; it is what causes inequality of incomes that can only partly be remedied by redistribution. It also suggests an enormous amount of waste — if lagging regions could close at least some of their productivity shortfall, a lot of prosperity would be gained.”

This article delves into ways in which policymakers can deal with regional inequality in the UK, as the wait for further governmental action on it continues. It discusses some aspects on which productivity growth depends, like “slow-to-acquire resources such as infrastructure and skilled labour” and “productive businesses choosing to expand”. Further, it goes on to suggest measures by which this regionally lagging productivity growth can be remedied and ways to target such policies better.

Click here to read the full article.

Related Reading:

The Great Divide: Regional Inequality and Fiscal Policy

Source: VoxEU CEPR

“The role of global value chains for development is often told from a manufacturing or agriculture perspective. This column discusses how the rise of global services value chains offers developing countries with new opportunities by providing jobs, revenue, and productivity growth. In addition, they do so in a more inclusive way than manufacturing. Policymakers need to invest in human capital and address regulatory barriers to services trade to make the most of this development.”

It draws examples of the Indian software services industry and business process outsourcing services in Philippines to expand on the idea of countries joining service GVCs. They find insights about themes like spillover benefits from trade in services and evidence about the relationship between trade and employment in the sector.

Click here to read the full blog.

Related Reads:

The Gains from (Services) Trade

In an upcoming publication for World Development titled, ‘The correlates of declining income inequality among emerging and developing economies during the 2000s’ (2022), author Edward Anderson of the University of East Anglia discusses patterns that were frequently observed in countries that experienced declining levels of income inequality.

Among the most significant results of the paper, one states that “the tendency toward declining inequality in the 2000s was stronger in countries with higher initial levels of inequality and larger increases in relative agricultural productivity, country-specific primary commodity prices, and remittance inflows.” (Furceri and Loungani, 2018) “The results suggest that the challenge now facing many emerging and developing countries is how to sustain the reductions in inequality achieved since the early 2000s, given the decline in commodity prices since 2015, and the social and economic repercussions of the COVID-19 pandemic”, the paper adds.

Click here to read the full paper.

They say economists rarely agree on one thing.

However, now this statement may not hold true as before. Based on a survey of members of the American Economic Association, a paper by Doris Geide-Stevenson and Alvaro La Parra Perez of the Weber State University compares the academic positions of economists over four decades.

“The main result is an increased consensus on many economic propositions, specifically the appropriate role of fiscal policy in macroeconomics and issues surrounding income distribution. Economists now embrace the role of fiscal policy in a way not obvious in previous surveys and are largely supportive of government policies that mitigate income inequality. Another area of consensus is concern with climate change and the use of appropriate policy tools to address climate change.”

Click here to download the paper and here to be a part of the discussion on it.

In a column for the public policy think tank, American Enterprise Institute, the top ten inbound and top ten outbound US states for the year 2021 have been compared using new data on net domestic migration data from the US Census Bureau.

Click here to read the full report.