Search results for " poverty"
showing 10 items of 283 documents
Neoclassical growth, manufacturing agglomeration, and terms of trade
2007
This paper presents an integrated view of economic growth, development traps, and economic geography. We explain why there is income convergence among some countries (neoclassical regime) and income divergence among others (poverty trap regime). Income convergence (divergence) and manufacturing industry diffusion (agglomeration) are re-enforcing each other in a cumulative process. Moreover, trade openness may trigger a catch-up process of an economy that is stuck in a \"poverty trap\". This catch-up is characterized by an increase in the investment-to-GDP ratio and an improvement of the terms of trade. A new dynamic welfare gain of trade liberalization is identified, which is likely to be l…
National fiscal consolidations and regional inequality in Europe
2016
Using annual data for 13 European countries over the period 1980-2008, we assess the impact of national fiscal consolidations on the income inequality of European regions. Regional dispersion increases in the outcome of consolidation episodes, particularly, when packages are more severe and implemented through spending cuts rather than tax rises. From a policy perspective, these findings suggest that fiscal consolidations driven by reductions in government spending can exacerbate regional disparities and may ultimately counteract the European policy efforts to promote territorial cohesion. Our results are robust to alternative inequality measures, the occurrence of crisis episodes and the e…
When fiscal consolidation meets private deleveraging
2020
Abstract Inspired by the recent experience in some euro area countries, we analyze the interaction between fiscal consolidation and private deleveraging in a model of a small open economy in a monetary union. The coexistence of long-term private debt and collateral constraints on new loans implies that, following an adverse financial shock, the economy enters a slow private deleveraging process, the duration of which is endogenous to collateral and debt dynamics. In this context, large and/or front-loaded consolidations increase the length and depth of private deleveraging, causing higher relative output losses over the medium run. As a result, such aggressive consolidation strategies entai…
How best to measure discretionary fiscal policy? Assessing its impact on private spending
2013
We develop a novel empirical approach to assess the effect of discretionary fiscal policy on private spending consisting of three stages: 1) extract the discretionary component of fiscal policy by estimating a fiscal policy rule; 2) use the residuals of the first-stage regression to investigate the existence of crowding-in and/or crowding-out effects both in the short and the medium term; and 3) condition the response of private spending on a set of country characteristics. We find that an expansion in discretionary fiscal policy boosts growth in the short term, but is detrimental in the medium term. In addition, the empirical findings suggest that the effect of discretionary fiscal policy …
FINANCIAL MARKETS' SHUTDOWN AND REACCESS
2017
We employ a discrete-time parametric duration model on a group of 121 countries over the period 1970–2011 and find that the probability of the end of financial markets' shutdown and reaccess falls as these events become longer. We also show that: (1) shutdown episodes are longer when economic prospects are poor and the degree of financial openness falls, the chief executive has been in office for long periods, and the country has a default history and (2) spells of reaccess tend to be longer when economic growth improves and financial openness increases, there are neither government crises nor government instability, and the country did not default in the past. (JEL C41, G15)
Fiscal adjustments and income inequality: a first assessment
2012
Using a statistical approach to identify fiscal adjustments, we find that fiscal consolidation appears to shorten the income gap. Fiscal austerity plans that succeed in bringing public debt to a sustainable path seem to be more likely to reduce inequality. Expansionary fiscal adjustments are particularly important to promote changes in the income distribution.
Financial Reforms and Income Inequality
2012
Available online 8 June 2012
Can re-regulation of the financial sector strike back public debt?
2015
This paper analyzes the impact of financial sector policy changes on the dynamics of public debt. Using a panel of 89 countries from 1973 to 2005, we find that while the implementation of (large) financial liberalisation policies significantly raises the public debt growth rate, the adoption of financial re-regulation measures leads to a mild reduction of public debt. Looking at the different typologies of financial sector policy changes, we show that stricter banking supervision, privatisations and restrictions to international capital flows contribute to a fast decline of the growth rate of public debt. In contrast, the removal of entry barriers and the elimination of interest rate contro…
What determines the likelihood of structural reforms?
2015
We use data for a panel of 60 countries over the period 1980–2005 to investigate the main drivers of the likelihood of structural reforms. We find that: (i) external debt crises are the main trigger of financial and banking reforms; (ii) inflation and banking crises are the key drivers of external capital account reforms; (iii) banking crises also hasten financial reforms; and (iv) economic recessions play an important role in promoting the necessary consensus for financial, capital, banking and trade reforms, especially in the group of OECD-countries. Additionally, we also observe that the degree of globalisation is relevant for financial reforms, in particular in the group of non-OECD cou…
Trade Openness and Income: A Tale of Two Regions
2015
In this article we present evidence of the long-run effect of trade openness on income per worker for two regions that have followed different liberalization strategies, namely Asia and Latin America. A model that re-examines these questions is estimated for two panels of Asian and Latin American countries over the 1980-2008 period using a novel empirical approach that accounts for endogeneity as well as for the time series properties of the variables involved. From an econometric point of view, we apply recent panel cointegration techniques based on factor models that account for two additional elements usually neglected in previous empirical literature: cross-dependence and structural bre…