The Unassuming Economist

From a paper by Cong Minh Huynh, and Khanh Nam Pham:

“In a comprehensive study across 32 Asian countries and territories spanning 2002–2018, we unveil the surprising impact of uncertainty on income inequality. Contrary to conventional expectations, our analysis reveals a fascinating trend: heightened uncertainty appears to wield a dual impact on income distribution. While it diminishes the income shares of both the richest and the poorest segments of society, the reduction is far more pronounced among the wealthiest quintile. Surprisingly, this outcome leads to a lessening of income inequality. The results are robust with fixed effects, feasible generalized least squares, and especially panel vector autoregression (PVAR) to tackle endogeneity concerns. The findings imply that in a more stable environment, the rich enjoy a higher growth of income than the poor, while in higher uncertainty, the income of the rich drops more dramatically than that of the poor. Thus, policymakers should take this into consideration for appropriately making income redistribution policies during normal and crisis periods, especially considering the varying impact of uncertainty on different segments of society.”

From a paper by Zhiwei Xu, Jianpo Xue, and Zhewei Zhang:

“This paper studies how uncertainty shocks shape consumption distribution in a quantitative model with heterogeneous agents and endogenous economic uncertainty. Our findings suggest that the measure of consumption inequality rises to an income uncertainty shock. This is primarily attributed to the heterogeneous liquidity demand elasticity on uncertainty across households. More specifically, the elasticity is higher for those from low-income families. Therefore, the consumption of households with low disposable income levels appears to be more adversely affected by uncertainty shocks relative to those with high disposable income. Besides, this paper highlights that the distributional effect amplifies the adverse impact of uncertainty on consumption. The policy analysis suggests that increasing the supply of liquid assets can effectively stimulate demand and reduce consumption inequality in response to uncertainty shocks.”

From a paper by Claudio Borio and Matthieu Chavaz:

“Recent and upcoming reviews of monetary policy frameworks have been putting the spotlight on
the evolution of inflation targeting. This article provides context by using a new database of
changes to the inflation targeting frameworks of 26 central banks since 1990. We use the data
to track changes in the frameworks’ flexibility in terms of the specification of the inflation target
and the role of other objectives, ie employment (or output) and financial stability. While the
specification of the numerical targets has become stricter (eg points rather than ranges), greater
flexibility has taken the form of less strict / longer horizons to achieve them and more weight on
other objectives, especially employment/output. These trends are typically more pronounced in
advanced economies and have widened differences with their emerging market peers.”

From a paper by Khadijah Iddrisu, Joshua Yindenaba Abor, Osman Issah, and Felix Owusu Gyebi:

“This chapter investigates the crucial role of monetary policy in shaping economic outcomes and promoting inclusive growth, particularly during periods of economic uncertainty. It begins by defining monetary policy and detailing the tools used by central banks, including unconventional methods like quantitative easing (QE) and forward guidance. The discussion highlights the importance of central bank independence (CBI) for protecting policy decisions from political influence and bolstering market credibility. It addresses the challenges central banks face in implementing monetary policy and provides an overview of inclusive growth. The chapter further explores how monetary policy impacts inclusive growth, examining its specific role during economic uncertainty. It also analyses the challenges, opportunities and future prospects of monetary policy in fostering inclusive growth amid economic instability. This thorough analysis emphasises the dynamic nature of monetary policy and its essential function in stabilising economies while advancing equity and development.”

From a paper by Yvonne Rueckert:

“The chapter examines the promotion of the ILO’s decent work agenda at global and national level. The ILO, which acts as a knowledge creator and standard setter, cooperates with inter-governmental organizations including the World Bank (WB) and the International Monetary Fund (IMF) in order to promote social dialogue. The chapter highlights some of the joint initiatives and examines organizational characteristics which promote and hinder the dialogue including, for example, organizational missions, values, and approaches to economics. At the national level the implementation of the social dialogue is strongly influenced by institutions such as employment and trade union laws and the organizational strength of social partners. In this context the examples of the UK and Spain highlight some of the differences between liberal market economies and Southern European welfare regime and consider the importance of social dialogue during times of crisis, such as the Covid-19 pandemic.”