Download or read book Distributional Effects of Crises written by Marina Halac and published by World Bank Publications. This book was released on 2003 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial crises affect income distribution by way of different channels. The authors argue that financial transfers are an important channel which has been overlooked by the literature. They study the role of financial transfers by analyzing some of the most severe Latin American crises during the past decades (Chile 1981-83, Mexico 1994-95, Ecuador 1998-2000, Argentina 2001-02, and Uruguay 2002). First, the authors investigate transfers to the financial sector-those from nonparticipants to participants of the financial sector. Second, they explore who receives these financial transfers by identifying the winners and losers within the financial sector. Their analysis suggests that financial transfers during crises are large and expected to increase income inequality.
Download or read book Distributional Effects of Crises written by Marina C. Halac and published by . This book was released on 2011 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial crises affect income distribution via different channels. This paper argues that there is an important channel overlooked by the literature, namely the financial channel. We study how this channel operates by analyzing data from several Latin American countries, including Argentina, Bolivia, Chile, Ecuador, Mexico, Peru, and Uruguay. First, we investigate financial transfers from non-participants to participants of the financial sector. Second, we explore who receives these transfers and what other reallocations occur within the financial sector. Our analysis shows that financial redistributions during crises are large, benefiting the rich and hurting the poor.
Download or read book Distributional Effects of Crises written by Marina C. Halac and published by . This book was released on 2003 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial crises affect income distribution via different channels. We argue that financial transfers is an important channel, which has been overlooked by the literature. By analyzing data from the Mexican (1994-1995) and Argentine (2001-2002) crises, we investigate two types of financial transfers. First, we study transfers to the financial sector, going from non-participants to participants of the financial sector. Second, we explore transfers within the financial sector, which are transfers among participants of the financial sector, as those from small to large and foreign depositors. Our analysis suggests that financial transfers increase income inequality.
Download or read book The Distributional Impact of Recessions the Global Financial Crisis and the Pandemic Recession written by Mr.Ippei Shibata and published by International Monetary Fund. This book was released on 2020-06-19 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the U.S. Current Population Survey data, this paper compares the distributional impacts of the Pandemic Crisis and those of the Global Financial Crisis in terms of (i) worker characteristics, (ii) job characteristics–“social” (where individuals interact to consume goods), “teleworkable” (where individuals have the option of working at home), and “essential” jobs (which were not subject to government mandated shut-downs during the recent recession), and (iii) wage distributions. We find that young and less educated workers have always been affected more in recessions, while women and Hispanics were more severely affected during the Pandemic Recession. Surprisingly, teleworkable, social and essential jobs have been historically less cyclical. This historical acyclicality of teleworkable occupations is attributable to its higher share of skilled workers. Unlike during the Global Financial Crisis, however, employment in social industries fell more whereas employment in teleworkable and essential jobs fell less during the Pandemic Crisis. Lastly, during both recessions, workers at low-income earnings have suffered more than top-income earners, suggesting a significant distributional impact of the two recessions.
Download or read book Knowing When You Do Not Know written by Ambar Narayan and published by World Bank Publications. This book was released on 2012-01-12 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: Microeconomic shocks are rarely predictable and their employment, poverty and distributional impacts are difficult to track because real-time data are typically not available. However, measuring these impacts is for designing effective and timely policy response.
Download or read book Income Inequality and the Stabilising Role of the Tax and Transfer System in Times of Crisis written by Vanda Almeida and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Aggregate crises often bring tremendous economic disruptions, which may persist for many years. Understanding their consequences and how to effectively design crisis-coping policies is therefore of capital importance. The aggregate effects of crises and the stabilising role of macroeconomic policies have been significantly studied in the literature. Much less attention, however, has been given to the distributional effects of crises and even less to the possible interactions between these effects and the post-crisis evolution of aggregate outcomes. If a crisis-led increase in inequality can feedback into an anemic recovery of economic activity, then the tax and transfer system may have a role in stabilising not only the income distribution but also the macroeconomy. Understanding how the system may affect both distributional and aggregate developments in a crisis aftermath is therefore key. This thesis aims at shedding new light on these issues, using multiple methodologies and datasets both at the micro and macro level, applying both an empirical and theoretical approach.The first paper provides a detailed assessment of the evolution of income inequality and the redistributive effects of the tax and transfer system following the 2007-2008 crisis, in the US. Using a wide range of indicators, it looks at several sections of the income distribution and analyses the contribution of different components of the tax and transfer system. The second paper develops a new method to model the household disposable income distribution and decompose changes in this distribution over time, integrating both a microeconometric and microsimulation approach. It applies the method to the study of changes in the income distribution in Portugal following the 2007-2008 crisis, accounting for the effects of the crisis and of the aftermath fiscal stimulus and consolidation policies. The third paper develops a theoretical heterogeneous agents DSGE model, with both ex-ante and ex-post household heterogeneity and unemployment insurance. It presents the results of a first quantitative experiment, studying the distributional and aggregate effects of a crisis and the role of unemployment insurance in shaping these effects, under several hypothetical crisis scenarios.Several conclusions can be drawn from the results obtained in this thesis. First, aggregate crises may have substantial heterogeneous effects across the income distribution, being particularly penalising for lower income groups, and these effects may be highly persistent. Second, the tax and transfer system can crucially shape distributional developments following a crisis. A strong tax and transfer system may fully cushion a crisis-led increase in inequality, while a weak one may deepen it. Beyond the effects of automatic stabilisers, discretionary policy choices may have substantial effects. Third, not only the size but also the design of the tax and transfer system matters for its role in times of crisis. In particular, a more progressive instrument will have a higher stabilising effect than a flat one, both at the distributional and aggregate level. Fourth, policies aimed at stabilising aggregate outcomes in times of crisis may have significant "collateral" effects on the income distribution. In particular, the implementation of consolidation measures may reinforce income losses induced by the contractionary effects of the crisis and increase the heterogeneity of the effects of a crisis on households' incomes. Finally, household heterogeneity and social insurance matter for the transmission of an aggregate crisis to aggregate outcomes. A crisis will lead to a higher contraction of aggregate consumption in a world where there are both ex-ante and ex-post sources of household heterogeneity than in a world where there is only ex-post heterogeneity. Furthermore, a crisis will imply a smaller contraction of aggregate consumption in a world with social insurance than in a world without.
Download or read book The Distributional Effects of Fiscal Consolidation written by Laurence M. Ball and published by International Monetary Fund. This book was released on 2013-06-21 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.
Download or read book Distributional Effects of Monetary Policy written by Valentina Bonifacio and published by International Monetary Fund. This book was released on 2021-07-30 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: As central banks across the globe have responded to the COVID-19 shock by rounds of extensive monetary loosening, concerns about their inequality impact have grown. But rising inequality has multiple causes and its relationship with monetary policy is complex. This paper highlights the channels through which monetary policy easing affect income and wealth distribution, and presents some quantitative findings about their importance. Key takeaways are: (i) central banks should remain focused on macro stability while continuing to improve public communications about distributional effects of monetary policy, and (ii) supportive fiscal policies and structural reforms can improve macroeconomic and distributional outcomes.
Download or read book The Impact of the Financial Crisis on Poverty and Income Distribution written by and published by . This book was released on 2010 with total page 4 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the financial crisis has spread through the world, the lack of real-time data has made it difficult to track its impact in developing countries. The authors use a micro-simulation approach to assess the poverty and distributional effects of the crisis. In Bangladesh, Mexico, and the Philippines, the authors find increases in both the level and the depth of aggregate poverty. Income shocks are relatively large in the middle (and, in Mexico, the bottom) parts of the income distribution. The authors also find that characteristics of people who become poor because of the crisis are different from those of both chronically poor people and the general population. Findings will be useful for policy makers wishing to identify leading monitoring indicators to track the impact of macroeconomic shocks and to design policies that protect vulnerable groups.
Download or read book The Distributional Impacts of Indonesia s Financial Crisis on Household Welfare written by Jed Friedman and published by . This book was released on 2001 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzing the distributional impacts of economic crises is important and, unfortunately, an ever more pressing need. If policymakers are to intervene to help those most adversely impacted, then policymakers need to identify those who have been most harmed and the magnitude of that harm. Furthermore, policy responses to economic crises typically must be timely. In this paper, we develop a simple methodology to fill the order and we've applied our methodology to analyze the impact of the Indonesian economic crisis on household welfare there. Using only pre-crisis household information, we estimate the compensating variation for Indonesian households following the 1997 Asian currency crisis and then explore the results with flexible non-parametric methods. We find that virtually every household was severely impacted, although it was the urban poor that fared the worst. The ability of poor rural households to produce food mitigated the worst consequences of the high inflation. The distributional consequences are the same whether we allow households to substitute towards relatively cheaper goods or not. However the geographic location of the household mattered even within urban or rural areas and household income categories. Additionally, households with young children may have suffered disproportionately adverse effects.
Download or read book The Aggregate and Distributional Effects of Financial Globalization Evidence from Macro and Sectoral Data written by Davide Furceri and published by International Monetary Fund. This book was released on 2018-04-06 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: We take a fresh look at the aggregate and distributional effects of policies to liberalize international capital flows—financial globalization. Both country- and industry-level results suggest that such policies have led on average to limited output gains while contributing to significant increases in inequality—that is, they pose an equity–efficiency trade-off. Behind this average lies considerable heterogeneity in effects depending on country characteristics. Liberalization increases output in countries with high financial depth and those that avoid financial crises, while distributional effects are more pronounced in countries with low financial depth and inclusion and where liberalization is followed by a crisis. Difference-indifference estimates using sectoral data suggest that liberalization episodes reduce the share of labor income, particularly for industries with higher external financial dependence, those with a higher natural propensity to use layoffs to adjust to idiosyncratic shocks, and those with a higher elasticity of substitution between capital and labor. The sectoral results underpin a causal interpretation of the findings using macro data.
Download or read book Financial Crises Explanations Types and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Download or read book The Impact of the Financial Crisis on Poverty and Income Distribution written by Bilal Habib and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: As the financial crisis has spread through the world, the lack of real-time data has made it difficult to track its impact in developing countries. The authors use a micro-simulation approach to assess the poverty and distributional effects of the crisis. In Bangladesh, Mexico, and the Philippines, the authors find increases in both the level and the depth of aggregate poverty. Income shocks are relatively large in the middle (and, in Mexico, the bottom) parts of the income distribution. The authors also find that characteristics of people who become poor because of the crisis are different from those of both chronically poor people and the general population. Findings will be useful for policy makers wishing to identify leading monitoring indicators to track the impact of macroeconomic shocks and to design policies that protect vulnerable groups.
Download or read book Inequality Leverage and Crises written by Mr.Michael Kumhof and published by International Monetary Fund. This book was released on 2010-11-01 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial and real crisis. The paper presents a theoretical model where these features arise endogenously as a result of a shift in bargaining powers over incomes. A financial crisis can reduce leverage if it is very large and not accompanied by a real contraction. But restoration of the lower income group's bargaining power is more effective.
Download or read book The Distributional Impact of the Crisis in Greece written by and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Modelling the Distributional Impact of the COVID 19 Crisis written by Cathal O'Donoghue and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Given the rapid spread of the COVID-19 virus, the State has had to respond rapidly and quite severely to flatten the curve and slow the spread of the virus. This has had significant implications for many aspects of life with differential impacts across the population. The lack of timely available data constrains the estimation of the scale and direction of recent changes in the income distribution, which in turn constrain policymakers seeking to monitor such developments. We overcome the lack of data by proposing a dynamic calibrated microsimulation approach to generate counterfactual income distributions as a function of more timely external data than is available in dated income surveys. We combine nowcasting methods using publicly available data and a household income generation model to perform the first calibrated simulation based upon actual data aiming to assess the distributional implications of the COVID-19 crisis in Ireland. We extend the standard definition of disposable income by adjusting for work-related expenditure, housing costs and capital losses. We find that market incomes decreased along the distribution of disposable income, but decreases in euro terms were more pronounced at the top than at the bottom. Despite this, inequality in market incomes as measured by the Gini coefficient increased over the crisis. Once we account for the decline in housing and work-related expenses, households situated among the bottom 70% of the distribution actually improved their financial situation on average, whereas losses are recorded for the top 30%.
Download or read book Assessing Poverty and Distributional Impacts of the Global Crisis in the Philippines written by Bilal Habib and published by . This book was released on 2017 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the financial crisis has spread through the world, the lack of real-time data has made it difficult to track its impact in developing countries. This paper uses a micro-simulation approach to assess the poverty and distributional effects of the crisis in the Philippines. The authors find increases in both the level and the depth of aggregate poverty. Income shocks are relatively large in the middle part of the income distribution. They also find that characteristics of people who become poor because of the crisis are different from those of both chronically poor people and the general population. The findings can be useful for policy makers wishing to identify leading monitoring indicators to track the impact of macroeconomic shocks and to design policies that protect vulnerable groups.
