Inequality in Good and Bad Times

Abstract

This paper provides evidence of a strong relationship between the short-term dynamics of growth and inequality in developing economies. We find that reductions in inequality during growth upswings are largely reversed during growth slowdowns. Using a new methodology (mediation analysis), we identify unemployment, and youth unemployment especially, as the main channel through which fluctuations in growth affect future dynamics in inequality. These findings suggest that both the quality of jobs created and labor market policies are important to ensure that growth outcomes are conducive to inequality reduction.

Fiscal Consolidation and Income Inequality in Latin America and the Caribbean

“…Krueger et al (2010) and OECD (2015) report that labor income inequality is countercyclical for AE. Hacibedel et al (2019) find that income inequality is countercyclical for developing countries as well.…”

The impact of Artificial Intelligence on productivity, distribution and growth

“…Yet, the more AI acts autonomously, the weaker the links between the agent (the AI system) and its principal(s) (the humans instructing or developing the AI system), putting into question the liability of the individuals or firms who benefit from the algorithm's autonomous decisions (OECD, 2017 [107]). Recent research shows that, in the absence of any liability system, AI development with uncertain welfare consequences tends to exceed what would be socially desirable, causing negative externalities (Guerreiro, Rebelo and Teles, 2023 [108]). Yet, defining AI accountability goals, processes and enforcement tools is challenging, not least because of the problem of pinpointing individual responsibilities in systems that involve multiple actors and resources (Novelli, Taddeo and Floridi, 2023 [109]).…”

Who Profits from Windfalls in Oil Tax Revenue? Inequality, Protests, and the Role of Corruption

“…Finally, the interaction of oil price shock and corruption in a period without oil tax sharing (column 8) is no longer significant. 23 22 See Kuznets (1955), Barro (2000), and more recently Hacibedel et al (2019) for the effects of GDP. Alderson (1995, 1997), Higgins and Williamson (2002), and Bergh and Fink (2008) are examples of the studies that addressed the impact of urbanization, age structure, and education, respectively.…”