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Author: Davide Furceri
Publisher: International Monetary Fund
ISBN: 1513531409
Category : Business & Economics
Languages : en
Pages : 26
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Book Description
This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.
Author: Davide Furceri
Publisher: International Monetary Fund
ISBN: 1513531409
Category : Business & Economics
Languages : en
Pages : 26
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Book Description
This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.
Author: Md. Al-Amin Parvez
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The opening of capital account of an economy allows the financially constrained local firms to attract and raise cost efficient capital from abroad in one hand and on the other hand allows the well performing and financially solvent local firms to go out other countries and avail the external economics of scale, low-cost factors of production and explore new markets. Since capital and skilled labor are relative complements, the opening of capital account could result in a higher income inequality between the skilled and unskilled labor classes. To present some pieces of evidence in this regard, a panel data set with secondary data of 11 Asia-Pacific countries have been analyzed by applying the general panel data analysis techniques and GMM model for both de jure and de facto measures. It has been found that the capital account liberalization (CAL) would increase the incomes more of skilled labor working in the industries than the unskilled labor.
Author: Daniel Jägers
Publisher: GRIN Verlag
ISBN: 3346785491
Category : Political Science
Languages : en
Pages : 83
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Book Description
Diploma Thesis from the year 2012 in the subject Politics - General and Theories of International Politics, grade: 1,0, , course: Maastricht Graduate School of Governance, language: English, abstract: Observing an increasing financial liberalization and income inequality during the last decades, this study investigates how the opening of financial markets is influencing income inequality. Operationalizing the research question, it focuses on capital account liberalization (CAL). The paper begins with an extensive literature review which recognizes the importance of a countries institutional quality and derives the following two hypotheses: CAL generally increases income inequality and CAL leads to an especially high increase in income inequality if the institutional quality is low. These hypotheses are empirically tested based on a panel data set covering 159 countries from 1996 – 2009. In the last decades the economies and financial systems of many countries liberalized and integrated with each other in order to benefit economically. However, at the same time income inequality and the gap between the extreme poor and the rich increased. The European Union is one of the regions with the most remarkable development regarding financial liberalization and integration. Some countries have been transformed within the last 25 years from centrally planned economies with controlled financial markets to market economies with open financial markets, integrated within the European Monetary Union. On the one hand this financial liberalization and integration is argued to be an important reason for economic growth. However, on the other hand it is strongly related to the Euro currency crises which is currently the main challenge facing the EU and is discussed daily on the news. The lower- and middle-classes in particular are protesting against immense financial supports for banks and investors on the one side and wage reductions, unemployment and social benefit cuts on the other. Can these inequalities be explained by the increasing liberalization of financial markets? Are they logical consequences of international financial liberalization and integration? This paper approaches these questions on a meta-level by answering the research question: How is Financial Market Liberalization Influencing Income Inequality? Before elaborating on this research question and explaining the investigated hypotheses it is explained what exactly is meant by financial market liberalization.
Author: Jess Esplin
Publisher:
ISBN:
Category : Income distribution
Languages : en
Pages : 39
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Book Description
Author: Xiang Li
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study examines the relationship between capital account liberalisation and income inequality. Adopting a novel identification strategy, namely a difference-in-difference estimation combined with propensity score matching between the liberalised and closed countries, we provide robust evidence that opening the capital account is associated with an adverse impact on income inequality in developing countries. The main findings are threefold. First, fully liberalising the capital account is associated with a small rise of 0.07-0.30 standard deviations in the Gini coefficient in the short-run and a rise as large as 0.32-0.62 standard deviations in the ten years after liberalisation, on average. Second, widening income inequality is the outcome of the growing income share of the rich at the cost of the poor. The long-term effect of capital account liberalisation includes a reduction in the income share of the poorest half by 2.66-3.79 percentage points and an increase in the income share of the richest 10% by 5.19-8.76 percentage points. Third, the directions and categories of capital account liberalisation matter. Inward capital account liberalisation is more detrimental to income equality than outward capital account liberalisation, and free access to the international equity market exacerbates income inequality the most, while foreign direct investment has an insignificant impact on inequality.
Author: Guillermo Lagarda
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
Recently, capital controls have made a comeback as both policymakers and academia have questioned the net benefits of liberalization and economic growth, especially after the 2008 Great Recession. While that literature has largely concluded that capital account liberalization may have detrimental effects on growth and accentuate financial instability in emerging markets, relatively little literature has examined the impacts of capital account liberalization on income inequality. Thus, this paper investigates the extent to which liberalization is beneficial for countries, conditional on institutional strength and financial depth. We specifically explore the differential impacts of capital account liberalization on income inequality during periods of economic expansion and contraction. The main findings suggest that the net impact of financial liberalization on income inequality is ambiguous during periods of economic expansion but detrimental during contractions. However, we also find that capital account openness needs not to be detrimental on income inequality if institutions are strong or - as it is the case in Latin America - if social safety nets are available.
Author: Peter Blair Henry
Publisher:
ISBN: 9780979037634
Category : Capital
Languages : en
Pages : 82
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Book Description
"Writings on the macroeconomic impact of capital account liberalization find few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. The lion's share of papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory, because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth"--National Bureau of Economic Research web site.
Author: Ms.Era Dabla-Norris
Publisher: International Monetary Fund
ISBN: 1513547437
Category : Business & Economics
Languages : en
Pages : 39
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Book Description
This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.
Author: National Academies of Sciences, Engineering, and Medicine
Publisher: National Academies Press
ISBN: 0309452961
Category : Medical
Languages : en
Pages : 583
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Book Description
In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.
Author: Ms. Valerie Cerra
Publisher: International Monetary Fund
ISBN: 1513572660
Category : Business & Economics
Languages : en
Pages : 54
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Book Description
Is there a tradeoff between raising growth and reducing inequality and poverty? This paper reviews the theoretical and empirical literature on the complex links between growth, inequality, and poverty, with causation going in both directions. The evidence suggests that growth can be effective in reducing poverty, but its impact on inequality is ambiguous and depends on the underlying sources of growth. The impact of poverty and inequality on growth is likewise ambiguous, as several channels mediate the relationship. But most plausible mechanisms suggest that poverty and inequality reduce growth, at least in the long run. Policies play a role in shaping these relationships and those designed to improve equality of opportunity can simultaneously improve inclusiveness and growth.
