The Unassuming Economist

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.”

From the Astana Times:

“The global economy remains slow, creating major challenges for reducing poverty and inequality. According to the IMF’s latest World Economic Outlook update, global growth is expected to be 3.2 percent this year and 3.3 percent in 2025, which is much lower than the pre-pandemic average of 3.8 percent.

Economic stagnation often leads to fewer job opportunities and low wage growth, worsening long-term unemployment and reducing the share of income that goes to workers. The pandemic has made inequality worse, with widespread job losses and income gaps causing a 0.5-point rise in the global Gini index in 2020.

In response to these challenges, governments need to focus on inclusive growth to create strong and resilient economies. Inclusive growth ensures that economic prosperity benefits everyone, especially the most vulnerable. It aims to create decent jobs, expand opportunities for all, and promote fairer wealth distribution.

Kazakhstan is at a crucial point in its development, working to shift toward a more inclusive and sustainable growth model. As part of its commitment to the United Nations 2030 Agenda, the country is focused on achieving the Sustainable Development Goals (SDGs) to improve the well-being and prosperity of its people. Over the past three decades, Kazakhstan has used its natural resources to achieve significant economic progress, becoming a key player among oil-producing nations.

However, the benefits of growth have not been equally distributed. The Gini coefficient, which measures income inequality, saw a notable decline from 0.366 in 2000 to 0.267 in 2009. Yet, the years following 2010 revealed a gradual rise in inequality, with the coefficient fluctuating between 0.278 and 0.291. Between 2013 and 2023, the Gini index increased by 5.1%, reflecting challenges in achieving equitable growth.

Data from the World Inequality Database highlight disparities in wealth distribution. The wealthiest 1% of Kazakhstan’s population controls 29.2% of the nation’s assets, while the bottom 50% holds a mere 4.6%. 

In response to these challenges, President Kassym-Jomart Tokayev introduced a new economic course in 2023. This ambitious strategy aims to achieve sustainable economic growth rates of 6–7% and double the size of the national economy to $450 billion by 2029. At the heart of these reforms lies the principle of inclusivity, with a strong focus on equitable wealth distribution to ensure that “every citizen tangibly benefits from the fruits of consistent economic progress.””

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From a paper by David Barmes, Irene Claeys, Simon Dikau and Luiz Awazu Pereira da Silva:

“Central banks have made significant progress on incorporating climate risks into their monetary policy frameworks to address the economic and financial challenges posed by climate change. Key developments include conducting climate scenario analyses to evaluate the financial system’s resilience to climate-related risks, exploring how climate change affects price stability and monetary policy transmission, integrating climate variables into forecasting frameworks, fostering collaboration through initiatives like the Network for Greening the Financial System (NGFS) and, in some cases, integrating sustainability considerations into monetary operations such as collateral frameworks and quantitative easing programmes. Despite this progress, a critical area remains underexplored: the challenges that inflation-targeting central banks may face if confronted with more frequent, persistent and severe climate-related supply shocks.

Unlike demand shocks, supply shocks create trade-offs for central banks and, unlike transitory supply shocks, persistent supply shocks can lead to a systematic and prolonged overshooting of inflation targets and undermine long-term macroeconomic stability. A small number of senior figures in the central banking community have recently begun to highlight the risks of a future of intensified supply-side volatility (Brainard, 2022; Schnabel, 2023; Maechler, 2024; Bénassy-Quéré, 2024). Building on these analyses, this report aims to spark a policy discussion on adaptive inflation targeting, with a view to equipping central banks with a framework, analysis and toolkit that enables them to better navigate these supply-side disruptions. To maintain credibility and ensure the smooth implementation of possible changes to existing inflation-targeting regimes, central banks must communicate these changes clearly in times of relative stability when inflation is at or around target.”