The Unassuming Economist

From the World Economic Forum:

“In the past three years, the World Economic Forum’s Centre for the New Economy and Society has accompanied more than 100 companies in their diversity, equity and inclusion journeys and identified, surfaced and highlighted impactful initiatives globally through its Lighthouse Programme.

The Diversity, Equity and Inclusion Lighthouse Insight Report 2025 features the latest cohort of initiatives selected by an independent expert panel for having achieved significant, scalable, quantifiable and sustained impact for one or multiple underrepresented groups.

The Lighthouse repository, comprising the cohorts from 2023 to 2025, currently includes 23 Lighthouses, as well as 20 cases highlighted for their promising and innovative design features, from across industries and geographies.

The objective of the Lighthouse programme is to surface and scale effective initiatives, equipping leaders with the necessary insights to contribute to faster impact across the global business community and policy-making space, and ultimately shaping more inclusive economies for all.”

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From a paper by Robert Gmeiner:

“Monetary expansion can lead to inflation. Using economy-wide measures, such as the all item CPI or the GDP deflator, these effects can be quantified, but this leaves open the question of which prices are inflating more, and thus whether monetary expansion is more harmful to the rich or poor, depending on their respective consumption patterns. This paper constructs quarterly consumer price indices specific to each income quintile in the United States from 1990 to 2022. Using transfer function autoregressive moving average models with exogenous regressors (ARMAX), significant inflationary effects of monetary expansion CPIs for the lowest income quintile are observed that are independent of changes in the CPI for higher income quintiles. More generally, households that are likely to spend a higher proportion of income on goods with inelastic demand experience higher inflation rates. These effects, which are robust to specification, are caused by monetary expansion from Federal Reserve purchases of government debt, but not other assets.”

From a paper by Alkis Blanz, Ulrich Eydam, Maik Heinemann, Matthias Kalkuhl:

“Since market-based climate policies such as carbon pricing affect the cost of using fossil resources, rule-based climate policy adjustments in response to fossil energy price shocks may promote macroeconomic stabilization. This raises the question of whether climate policy should adapt to short-term fluctuations in fossil energy prices. We examine this question by employing a dynamic stochastic general equilibrium (DSGE) model calibrated for the German economy. Our results indicate that the macroeconomic and welfare impacts of rule-based carbon pricing adjustments depend on the share of recycled revenue. If revenue is fully absorbed, lowering emissions prices can stabilize the economy in response to rising energy prices. Conversely, if revenue is at least partially recycled, maintaining a stable carbon price will improve overall welfare. With a stable carbon price, revenue recycling acts as insurance against fluctuating energy prices. This result remains robust across several robustness checks.”

From a paper by Luciano Vereda, Helder Ferreira de Mendonça, and George Morcerf:

“Our study advances the modeling of forecast revisions by accounting for the nuanced impact of informational shocks across different time horizons. Specifically, we introduce modifications to the error structure of regression models used to detect biases in macroeconomic forecasts. Drawing on consensus forecasts of inflation and output growth from the central banks of Brazil, Chile, and Mexico, our approach offers a nuanced understanding of bias estimation uncertainty, leading to a more robust rejection of the null hypothesis of no biases. By elucidating the differential effects of informational shocks on forecast accuracy across time periods, our findings not only contribute to the refinement of forecasting methodologies but also have implications for policymakers and economic analysts striving for more accurate and reliable predictions in dynamic economic environments.”

From a paper by Pierre-Richard Agénor:

“This chapter provides an overview of the literature on middle-income traps, and draws policy lessons for African countries that have successfully crossed to middle-income status in recent years. The first part examines the descriptive and statistical evidence on these traps. The second discusses the various arguments that have been put forward to explain their existence and persistence. These arguments include diminishing returns to physical capital, exhaustion of cheap labor and imitation gains, insufficient quality of human capital, inadequate contract enforcement and intellectual property protection, distorted incentives and misallocation of talent, lack of access to advanced infrastructure, and lack of access to finance, especially in the form of venture capital. The third and fourth parts draw together the lessons that can be learnt from countries that have successfully transitioned from middle-to high-income status, and discuss how these lessons can help to prevent today’s middle-income countries in Africa from falling into a trap.”