April
Learning about long-term consequences of armed conflict
What do outbreaks of armed conflict mean for households in war-torn areas? This column presents findings from data on Iraq on how household level decision-making is affected by conflict. The evidence suggests that armed conflict episodes have long-term effects on human capital that far outweigh the obvious and immediate impact of armed violence.
Labour market flexibility, unemployment and social protection
There are concerns that greater flexibility in the labour market will lead to more layoffs, higher unemployment and increased public spending on social protection. This column presents analysis suggesting that in fact labour market flexibility is negatively related to the unemployment rate and social protection spending.
Rising temperatures, melting ratings
Enthusiasm for ‘greening the financial system’ is welcome, but does the explosion of ‘green’ finance indicators reflect the science? This column reports research that uses artificial intelligence to construct the world’s first ‘climate smart’ sovereign credit rating. The results warn of climate-driven downgrades as early as 2030.
The construction industry and economic growth in MENA countries
Does the construction industry still lead economic growth in countries in the Middle East and North Africa? This column reports evidence on the relationship between construction investments and economic development for the ten biggest economies in the region over nearly half a century. The results indicate that the relative importance of construction in these countries has started to decline as GDP per capita grows.
Managing divergent recoveries
Recoveries from the Covid-19 crisis are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support and more reliance on tourism do less well. This column, originally published on the International Monetary Fund (IMF) blog, concludes that without multilateral efforts to give all people a fair shot, cross-country gaps in living standards could widen significantly and decades-long progress in global poverty reduction could reverse.
No sticks, just carrots: a negative income tax for Egypt
Egypt’s government has provided cash assistance to vulnerable workers during the Covid-19 crisis. As this column explains, there is an opportunity to transform this temporary policy into a rules-based fiscal stimulus or automatic stabiliser that can strengthen the resilience of the Egyptian economy to future downturns. A negative income tax could also reduce informality and help to eradicate extreme poverty.