Poverty and income inequality

ASEAN: Does convergence mean polarisation?

Jayant Menon, 2 June 2013

How will the new members of ASEAN catch up? This column argues that the gap in income is closing between the two groups within ASEAN: the newly industrialising economies and the older members. However, a marked cost of this convergence has been increasing income inequality within individual countries. To remedy this, and to increase overall convergence, a number of conditions must be simultaneously met: investment in social infrastructure, especially education and health; improving the investment climate; and land reform that directly redresses asset inequality.

Reforming energy subsidies globally

Benedict Clements, Stefania Fabrizio, Ian Parry, 27 April 2013

Energy-subsidy reform is notoriously difficult. This column argues that the environmental and social payoff from a concerted worldwide effort to replace these subsidies with better targeted measures would be substantial. Subsidy reform is an especially attractive option for countries under pressure to bring public debt to more prudent levels. The success of reform in several countries shows that the challenge is not insurmountable.

Fiscal consolidation and implications of social spending for long-term fiscal sustainability

Rossana Merola, Douglas Sutherland, 31 March 2013

During the economic and financial crisis, fiscal positions across OECD countries deteriorated sharply. This column agues that population ageing and trends in social spending will further challenge the sustainability of fiscal balances. Research suggests that the scale of fiscal consolidation that will be needed to ensure long-term sustainability is large, but policymakers can look at the potential benefits of policy reform in mitigating budget pressures.

Trade, geography, and the unifying force of Islam

Stelios Michalopoulos, Alireza Naghavi, Giovanni Prarolo, 8 December 2012

Islam spread remarkably quickly before the era of European colonialism. This column argues that an important economic factor in determining the geographic range was spatial inequality that necessitated a politically unifying force like Islam. Regions that harboured such economic inequality were especially ripe for a system like Islam that offered progressive redistributive tenets with centralised authority to enforce them.

Jobless recoveries and the disappearance of routine occupations

Henry Siu, Nir Jaimovich, 6 November 2012

The US economy is recovering. But what explains the stubborn malaise in its labour market? This column argues that future recovery from recession will likely be jobless because technological advances and mechanisation now enable troubled firms to shed middle-income jobs in favour of machines and automation. If these jobs are not recouped during subsequent economic recovery, future recoveries may well remain jobless.