Philipp Hartmann, Glenn Schepens 12 May 2021
The 2020 ECB Forum on Central Banking addressed some key issues from the ongoing monetary policy strategy review and embedded them in discussions of major structural changes in advanced economies and the post-COVID recovery. In this column, two of the organisers highlight some of the main points from the papers and debates, including whether globalisation is reversing, implications of climate change, options for formulating the ECB s inflation aim, challenges with informal monetary policy communication, relationships between financial stability and monetary policy, how to make a monetary policy framework robust to deflation or inflation traps and the role of fiscal policy for the recovery from the pandemic.
HomeEditors Picks How research covering more than 5,000 years sheds light on income inequality today
How research covering more than 5,000 years sheds light on income inequality today
By
Clark Merrefield
Tuesday May 11, 2021
(Image: Adobe/yezep)
King Menes unified Egypt around 5,000 years ago, making it among the world’s first central governments.
Millennia later, Namibia, on the southwest coast of Africa, was under German then South African rule until 1990, when its independent government was formed.
Egypt’s history of statehood is old and Namibia’s is new, yet both countries have this in common: relatively high levels of income inequality today.
Central governments that are very old or new tend to have higher inequality than those in the middle a “just right” Goldilocks zone of lower inequality for countries with governments established sometime between Egypt and Namibia.
Giancarlo Corsetti, Gernot Müller
The design of public budget constraints and the effects of austerity policies are salient topics for both policymakers and scholars. The main goal of this literature is to understand whether and how fiscal adjustment can improve the sustainability of welfare systems (Alesina and Perotti 1996, Corsetti 2012, Born et al. 2015). Overall, previous studies find mixed effects on budget constraints in terms of deficit and public debt reduction (Asatryan et al. 2015, Grembi et al. 2016, Coviello et al. 2017, Heinemann et al. 2018). Recent studies have also focused on the adverse political effects of austerity policies (Stiglitz 2016, Fetzer 2019).
In a recent paper (Daniele and Giommoni 2020), we study the impact of fiscal austerity on corruption in the context of Italian municipalities. We find that these budget rules, the Domestic Stability Pact, has led to a reduction in corruption, driven by lower discretionary spending.
Nicola Fuchs-Schündeln, Dirk Krueger, Alexander Ludwig, Irina Popova
School closures are among the most controversial policies used to fight the pandemic, as their costs loom large. Prolonged teaching disruptions affect not only children’s learning outcomes but also their psychological and emotional development, with children from low socio-economic backgrounds particularly hurt (Engzell et al. 2020, Grenewig et al. 2020). School closures are also detrimental for the careers of parents who take on more educational responsibilities and have to reduce the number of hours worked (Fuchs-Schündeln et al. 2020). Since women typically shoulder most of the childcare responsibilities, school closures may also widen the gender wage gap (Alon et al. 2020).