Search results

The tendency for nations to move toward implementing independent and conservative central bankers has gained momentum over the past two decades. This trend continues despite the fact that the benefits of central bank independence (CBI) are highly contested among economists. The ability of a central bank to boost economic growth has been seriously compromised due to the emergence of the concept, or knowledge, of independent CBI as per the New Zealand model. In this chapter, we will propose a new line of research for the knowledge economy to underscore the ramifications of substituting local, or regional, knowledge by international knowledge. The goal of this chapter is to assess whether the new knowledge has real merits vis-à-vis the old knowledge of central banking. If not, this chapter will issue a caveat to policy makers to be careful in replacing old knowledge by new knowledge – the new does not always mean a better knowledge. In other words, this chapter will highlight the potential dangers of using untested new knowledge and its economic consequences. This chapter contributes to the literature on CBI by introducing analytical methods not previously used in empirical examination of central banks. Analysis has uncovered the presence of high mobility in economic variables that is unexplained by changes in CBI. The chapter addresses the question of mobility by making use of mobility measures and linear regression in an attempt to identify the source of this mobility. The results from the regression are significant to the theory of central bank independence as they imply that consolidation of inflation rates are not reciprocated with consolidation of economic growth, as conventional theory would suggest.

Recent evidence on the impact of the crisis on developed countries shows that changes in income inequality and poverty have been relatively small in spite of the macroeconomic heterogeneity of the recession across different economies. However, when evaluating individual perceptions linked to the crisis any changes in the chances to scale up or lose ground in the income ladder are also crucial. Our aim in this paper is to analyze to what extent the recession has had an impact on individual equivalent incomes and, in particular, on the prevalence of downward mobility in two developed countries where job losses have been large. We find that income losses have increased, particularly in Spain, and while age and education are key determinants of the probability of experiencing an income loss in both countries, the presence of children only increases the probability of an income loss in Spain.

The purpose of this paper is to question the frequently heard claims of a negative relationship between inequality and intergenerational mobility (such as the “Great Gatsby Curve” by Alan Krueger) and to propose entrepreneurship as the neglected prime countervailing force against the putative advantages of the rich.

A critical examination of evidences marshalled to support the case for a negative relationship between inequality and mobility, in terms of the appropriateness of statistical inferences and the consistency between implications and observations. The paper adopts alternative approach of Austrian economic in emphasizing the role of entrepreneurship in generating mobility.

The putative negative relationship between inequality and mobility is not supported by evidence. The result is partly that egalitarians tend to skip close examination when they run into evidence that seems to support their preconception. It is also partly that the dominant tradition in economics, based on the model of efficient allocation of given resources, induces them to overlook entrepreneurship, the prime wealth creator and generator of mobility.

The research outlines an argument that the rich do not have advantage in entrepreneurship because it depends not on the ownership of currently valued resources, but on the discovery and exploitation of profitable opportunities. This claim is made based on Kirznerian perspective and author’s own theory of inference and learning process. However, it would be nice to able to provide empirical evidence of this claim made in the paper.

Many policies of redistribution, based on the belief that increase in inequality (as measured by Gini coefficient) signifies a diminution of intergenerational mobility, should be re-examined since the alleged negative relationship between inequality and intergenerational mobility turns out to be untrue. For greater intergenerational mobility, entrepreneurs should be encouraged, by allowing them to experiment freely.

Emphasizing the role of entrepreneurship in intergenerational mobility and the dealing with the question of whether or not the rich would have advantage in entrepreneurship is original to this paper.

Based on representative longitudinal data (CNEF 1980–2013) the paper analyzes gender differences of the level and the determinants of earnings dynamics in the work life of different cohorts of employees in Germany, Great Britain, and the United States. Notwithstanding country differences concerning the existing welfare state regime constituting the institutional settings of the labor market, the educational system, and family role models, the empirical results show decreasing earnings mobility in the work history. The earnings level, educational attainment, family size, the occupational choice, the career stage, the birth cohort, and the macroeconomic fluctuations significantly influence earnings mobility. In the United States, earnings mobility is significantly lower and gender differences are less pronounced than in Germany and Great Britain. The gender gap of earnings mobility is less expressed for younger cohorts of German employees. The increase of the gender gap of earnings dynamics in the course of the work career indicates continuing heterogeneity of labor market behavior and outcome of women and men which contribute to persistent economic and social stratification.

There are conflicting views of the primary role of income inequality in economic development. Many expect that higher income shares at the top reflect substantial economic contributions while others think that these increases in top shares have not translated into higher economic growth. Recently, this debate has been reinvigorated by a new proposal: higher income inequality could hurt economic performance by decreasing future intergenerational mobility. We contribute to this debate by examining the relationship between intergenerational perceived job status mobility and past income inequality. We find a robust negative association of lagged income inequality with upward intergenerational job status mobility and a robust positive association of lagged income inequality with downward intergenerational job status mobility. In addition, we find that the quality of political institutions and religious fractionalization both contribute positively to job status mobility. Higher levels of past Gross Domestic Product (GDP) result in less upward job status mobility and more downward job status mobility.

The author proposes analyzing the dynamics of income positions using dynamic panel ordered probit models. The author disentangles, simultaneously, the roles of state dependence and heterogeneity (observed and non-observed) in explaining income position persistence, such as poverty persistence and affluence persistence. The author applies the approach to Chile exploiting longitudinal data from the P-CASEN 2006–2009. First, the author finds that income position mobility at the bottom and the top of the income distribution is much higher than expected, showing signs that income mobility in the case of Chile might be connected to economic insecurity. Second, the observable individual characteristics have a much stronger impact than true state dependence to explain individuals’ current income position in the income distribution extremes.

This paper aims to explore empirically the interactions between the coronavirus disease 2019 (COVID-19) pandemic, economic mobility and containment policy to test the effectiveness of mobility restrictions in controlling the spread of the disease.

This study used weekly regional data for the 17 Philippine regions and estimated the effect of shocks using a panel vector autoregression (VAR) model.

The authors conclude that COVID-19 deaths and incidence primarily respond to shocks that affect the lethality and transmissibility of the disease, and mobility restrictions and strict quarantine levels do not seem to have any impact on these outcomes. The movement of people during this pandemic period, on the other hand, seems to respond more to economic factors and government restrictions and less to the presence of and the characteristics of the disease.

Since the pandemic is a public bad, community cooperation is a must to address it. Clear government messaging that dispels doubts on the safety of the newly developed vaccines and that encourages public acceptance and trust might be a better nudge compared to a heavy-handed and threatening approach.

The purpose of this paper is to examine income inequality and income mobility, which have been central to understanding India’s recent economic development.

This paper uses the first two waves of the India Human Development Survey data for the year 2004–2005 and 2011–2012 to analyze income inequality and income mobility using longitudinal data, and is the first to do so at a nationally representative level. In this research paper, we address three related research questions: How have been the patterns of income mobility in India? What are the trends, levels and sources of income inequality in India? and finally And What is the structure of household income mobility?

The paper examines the trends, levels, sources and factors of income inequality and income mobility in India between 2005 and 2012. The results further show the case for high persistence at the top of income distribution but lower persistence at the bottom.

Because of the chosen research approach, the research results may lack spatial analysis. Therefore, researchers are encouraged to test the proposed propositions further.

The paper suggests that, in the end, the nature of longer-term well-being is crucial to designing policy interventions to effectively tackle inequality, and economic mobility can be seen as an avenue to long-term equality.

This study can further be extended to look at polarization issues at the national and sub-national levels.

This paper shows the analytical framework of additive decomposition of income mobility out of two sources, namely mobility due to the transfer of income within given structure and mobility due to economic growth or contraction in rural and urban India.

Using longitudinal datasets from Chile and Nicaragua, we compare intragenerational earnings mobility over a decade for two economies with similar inequality levels but divergent positions in equality of opportunities within the Latin American region. Our results suggest that earnings mobility, in terms of origin independence of individual ranking in the earnings distribution, is greater in Chile than in Nicaragua.