## mrlicsea ## Source details **Canonical URL:** [mrlicsea](https://www.imf.org/-/media/files/publications/dp/2021/english/mrlicsea.pdf) ## Other formats - [Markdown version](/-/media/files/publications/dp/2021/english/mrlicsea.pdf.md) - [Structured JSON version](/-/media/files/publications/dp/2021/english/mrlicsea.pdf.json) --- ### Monetary policy frameworks and transmission in LICs - Evolution of policy frameworks can obfuscate identification of the monetary transmission mechanism (MTM); modernization of central bank frameworks in LICs complicates standard statistical identification. - Narrative and theoretical evidence: - Berg and others (2014a) use a narrative approach for Kenya, Rwanda, Tanzania, and Uganda and find clear evidence of the transmission mechanism in most countries, with differences attributable to the policy regime in place. - Portillo and others (2018) show in a theoretical setup that the monetary policy in place plays a role in determining the strength of the MTM. - Data quality and granularity matter: - Aggregate-data studies typically document a weak bank lending channel in LICs. - Abuka and others (2019) using microdata for Uganda find significant real effects of the bank lending channel. - Limits of standard empirical methods: - VAR methods frequently suggest the MTM is weak and unreliable in LICs. - Li and others (2016) identify short data samples, measurement error, high-frequency supply shocks, and other LIC features that: - may bias estimated effects in LICs; - may undermine the precision of estimates, causing results to appear “insignificant” even when underlying transmission is strong. - Short samples and measurement errors can lead to attenuation bias in regression-based approaches, including local projections. - Commodity and external price shocks: - Food and oil prices and the exchange rate account for the bulk of inflation dynamics in some LICs (Charry, Gupta, and Thakoor 2014 for Rwanda). - Portillo and Zanna (2018) show first-round effects of international food price shocks depend on asset market structure and cast doubt on the view that international food price shocks are inherently inflationary in LICs. - Nguyen and others (2015): domestic demand pressures have played a larger role in driving inflation in SSA in the last decade; the policy regime helps explain the role of shocks in driving inflation. - Choi and others (2018) show the impact of an oil price shock on inflation in developing countries is not overly large. ### Frontier models, FPAS, and model-based monetary policy analysis - Frontier models tailored for LICs provide insights on policy design: responses to commodity price shocks, role of monetary aggregates, and exchange rate management. - DFID–IMF collaboration developed modern macroeconomic models reflecting LIC features to examine food shocks, monetary aggregates, and exchange rate management. - Selected model findings: - On food: - Andrle and others (2014) for Kenya: imported food price shocks important for inflation; accommodating monetary policy affected the nominal exchange rate. - Portillo and others (2016): optimal policy prescribes virtually complete stabilization of non-food inflation; food subsistence amplifies welfare losses of policy mistakes. - On monetary aggregates: - Berg, Portillo, and Unsal (2018): model with informational role for monetary aggregates; examines conditions under which adherence to money targets is optimal. - Portillo and others (2018): money-targeting frameworks cause high unintended short-term interest rate volatility and poor communication, reducing policy effectiveness. - Gonçalves (2015): for Kenya, Tanzania, and Uganda, monetary policy respected the Taylor Principle—nominal interest rates, on average, increase more than one-to-one with inflation. - On the exchange rate: - Benes and others (2015): some exchange rate management via foreign exchange interventions within an inflation-targeting context can be welfare improving. - Buffie and others (2018): “leaning against the wind” enhances the efficacy of inflation targeting. - Iyer (2017): benefits of exchange rate flexibility may depend on labor and product market development; a flexible exchange rate can exacerbate currency and factor misalignments in agricultural commodity-exporting economies. - Masson and others (2014): existing monetary unions in Africa seem economically viable; benefits from new or expanded unions are limited due to low regional trade and strong shock and fiscal asymmetries. - Forecasting and Policy Analysis System (FPAS): - FPAS includes small macroeconomic models integrating LIC features to produce coherent forecasts, alternative scenarios, and systematic inputs for central bank decisions. - Examples: - Andrle and others (2013): SSA forecasting and policy analysis model with explicit role for money targets and target misses; central role for food prices and global developments; nests money-targeting, interest-rate frameworks, and intermediate cases; applied to Kenya. - Baldini and others (2015) for Zambia: policy lessons include forward-looking policymaking, monitoring banking system developments rather than exclusively reserve money, and acknowledging limits of policy to offset external-shock volatility. - Data constraints and mitigation: - Models useful even with limited data; sensitivity analysis and alternative scenarios address parameter uncertainty. - FPAS design uses partial higher-frequency indicators where available to cope with quarterly national accounts available with a lag. ### Country uptake, capacity development, and IMF institutional engagement - Takeaway: uptake of model-based analysis translated into improvements in analysis, formulation, and communication of monetary policy in LIC central banks. - Country examples of FPAS adoption and impacts: - Kenya: 2013 IMF country report incorporated Andrle and others (2013) model to analyze disinflation sources; development of forward-looking policy recommendation process and organizational changes in the Central Bank of Kenya. - Ghana: support for medium-term projections and monetary policy advice; customized training enhanced forecasting and communication capacities. - Uganda: model-based outputs provided to monetary policy decision-making committees; regular support for assessing policy stance and preparing inflation forecasts. - Rwanda: Charry, Gupta, and Thakoor (2014) extension showed majority of past target misses explained by monetary policy shocks and instability of money demand. - Capacity-building and regional coordination: - Technical assistance coordinated with AFRITACs and EAC MAC; EAC encouraged FPAS implementation and established a regional modelling and forecasting working group. - Training for IMF African Department members to use customized FPAS. - In 2020, an online IMF course on Model-Based Monetary Policy Analysis and Forecasting launched. - IMF policy framework implications: - DFID–IMF research informed IMF 2014a and IMF 2015a policy papers recommending more flexible conditionality and forward-looking frameworks emphasizing price stability and medium-term numerical inflation targets. - LICs can make rapid progress in modernizing frameworks, contingent on policymaking capacity, financial and macroeconomic development, and stability. ### Ongoing agenda and emerging issues for LIC monetary policy work - Ongoing and future work priorities: - Gauging monetary frameworks across countries and over time; constructing an index of soundness of monetary policy frameworks (Unsal, Papageorgiou, and Garbers forthcoming). - Further understanding transmission of monetary policy in LICs. - Interaction and policy mix of monetary, macroprudential, exchange rate, and fiscal policies. - Adoption of digital currencies; mitigating cybersecurity risks and climate change. - Interactions between monetary policy and inequality, and fiscal–monetary interactions. - Focused work on subgroups within LICs (for example, fragile states, disaster-prone countries). - Broad principles for sound frameworks: forward-looking formulation centered on price stability, clear and well-functioning operational frameworks, and timely and effective communications. ### Gender issues, informality, and macroeconomic implications - DFID–IMF collaboration findings and simulations: - Nigeria: - Closing—for each income group—the gender gap in years of schooling would boost long-term GDP in Nigeria by 5 percentage points. - More education would generate higher wages for women (8 percent), increasing female labor force participation from 76 to 87 percent. - Men’s average wages would not be negatively affected. - Income equality would improve: Gini coefficient would fall by 2 percentage points. - Senegal: - Women tend to receive 30 percent less than men after controlling for characteristics. - Enforcing anti-discrimination policies that drop average gender wage gap by 5 percentage points would increase female labor force participation by 9 percentage points, boost GDP by 5 percent, and increase tax revenues by 1 percent of GDP. - Sierra Leone: - Providing each child with at least lower secondary education could, in the long term, boost GDP by 40 percent. - Closing gender gaps in education across income groups or increasing the quality of education could yield gains of 8 and 27 percent of GDP, respectively. - Lao P.D.R.: - Measures to close the gap in returns to experience and eliminate workplace discrimination could lead to a decrease of the gender pay gap by almost 12 percentage points. - Informality and gender: - Higher female presence in the informal sector is associated with larger gender gaps in education, fewer family planning needs satisfied, and higher rates of early marriage. - In urban Senegal, being a woman increases the probability of working in informality by 8.5 percent; having kids reduces men’s probability of informality but increases women’s. ### Fiscal instruments, quantitative macroeconomic framework, and case studies - Quantitative Macroeconomic Framework: - Models have microeconomic foundations and are calibrated to replicate key macroeconomic patterns; calibration selects parameters to match data moments and is used where treatment-control identification is ill-suited. - LIC models capture large agricultural and informal sectors, sizable rural-urban gaps, limited financial development, and endogenous distribution of population. - Key lessons on fiscal instruments (Box 2 findings): - 1. Consumption taxation (for instance, value-added tax) appears to be generally regressive, but its efficiency costs are small. - 2. Labor and capital income taxation (for instance, personal and corporate income taxes) incur higher efficiency costs because they are levied upon small formal sectors; income taxation is on average progressive. - 3. Cash transfer programs (for instance, universal basic income) effectively reduce inequality, but they lead to reductions in savings and hence investment since poor people tend to have higher marginal propensity of consumption. - 4. Public infrastructure investment raises overall productivity and compensates efficiency loss with little distributional impacts; sector-specific investment can have distributional implications when labor mobility is limited. - Pilot studies and country examples: - Uganda, Honduras, Guatemala, Republic of the Congo, Benin, and Senegal feature in pilot policy simulations combining revenue mobilization and spending reforms. - Case study: Senegal (IMF (2019c)): - Senegal plans to increase tax-to-GDP ratio from 16 percent to the regional target of 20 percent in the West African Economic and Monetary Union to finance public investment. - Simulation results: the reform package, if successfully implemented, can lead to sizable economic growth (about a 2 percent increase in GDP) with marked benefits to the economically disadvantaged population (Gini coefficient decreases substantially in the rural area). - Policy notes: consumption taxation best paired with cash transfers or in low-inequality settings; income taxation pairs well with public investment or in growing economies to mitigate efficiency costs. ### Financial sector reforms, development dimensions, and distributional interactions - Financial development dimensions: breadth (ease of access to credit), depth (loan-to-collateral relation), and efficiency (cost of intermediation). - Cross-country example: - Fractions of firms having access to credit: Pakistan 7 percent, Bangladesh 34 percent. - Average collateral requirement measured by loan-to-collateral ratio is 77 percent higher in Bangladesh, suggesting shallower depth. - Four general insights from Dabla-Norris and others (2021): - 1. Reforms are most effective when the most binding constraint is alleviated; aim for no obvious shortages across dimensions. - 2. Relaxing collateral constraints is more effective in raising output and productivity compared to reducing credit market entry cost or intermediation cost. - 3. Reducing credit entry cost and relaxing collateral constraints initially increase inequality, but further development along these dimensions eventually pushes inequality down. - 4. Increasing the efficiency of financial intermediaries always drives inequality higher because relatively rich users benefit most; general equilibrium spillovers to workers are small. - Interaction cases: Ethiopia and Myanmar (Box 4): - Ethiopia: - Underdeveloped financial sector; policies fund public enterprises; real deposit rates negative. - Reform simulated: increase deposit rates and reduce share of funds channeled to public sector. - Findings: increasing efficiency of financial intermediaries raises private sector activity and economic growth but causes inequality to rise. - Complementary policy: increasing sectoral labor mobility (for instance by strengthening land rights or providing accessible training and education) mitigates negative distributional effects. - Myanmar: - Labor mobility appears less constrained; financial reforms lead to lower inequality even without complementary labor market interventions. ### Globalization, capital account liberalization, and diversification - Globalization (Lang and Tavares 2018, KOF Index): - Positive but diminishing growth effect: at the average globalization level of low-income countries (Nigeria), increasing the globalization index by one point (which is half of its average annual change) is estimated to increase the five-year growth rate by about 2 percentage points. - Growth effect fades when globalization reaches levels of Australia, Chile, or Poland. - Distributional effect: a one-point increase in the globalization index would lead to one-third of a point increase in the Gini coefficient; the rich benefit nearly three times more than the poor. - Net implication: globalization narrows cross-country income disparity but worsens within-country income distribution; it appears to contribute to poverty reduction with no evidence that any income group is systematically hurt. - Capital account liberalization (Furceri and Loungani 2018): - Liberalization episodes associated with contemporaneous capital flow increases of about 5 percent of GDP. - Distributional effects: immediate increase of the Gini coefficient by about 0.8 percent in one year; cumulative increase five years after episodes rises to about 1.4 percent. - Role of financial inclusion: with high financial inclusion Gini increases short term but returns to original level in about five years; with low inclusion distribution worsens over time. - Diversification rationale and payoffs: - Diversification yields growth and stability payoffs, reduces reliance on volatile products, and is associated with lower income and gender inequality, higher innovation and FDI, and more businesses. - Successful examples: - Malaysia: over four decades, GDP per capita rose 17 times; exports rose from about 40 percent of GDP in the early 1970s to more than 100 percent in the mid-2000s. - Vietnam: GDP per capita rose nearly five times in 20 years; exports rose from about one-third of GDP to 86 percent of GDP; agriculture declined from 32 percent of GDP in 1990 to 16 percent in 2011; industry and construction rose from 25 percent to 42 percent of GDP. - Policy priorities for diversification: human capital accumulation, reducing trade barriers, financial sector development, and gender-friendly policies. *Source: mrlicsea* ### References ������������������������������������������������������������������������������������������������������������� ### References ### Boxes - Box 1. Gender Gaps and Informality .............................................................................32 - Box 2. The Quantitative Macroeconomic Approach ......................................................42 - Box 3. Revenue Mobilization and Inequality in Senegal ................................................45 *mrlicsea - References, page listings as provided* ### Box 4. Financial Reforms in Ethiopia and Myanmar .....................................................48 ### Box 4. Financial Reforms in Ethiopia and Myanmar ### Availability of source text - The supplied content excerpt does not include the substantive text, findings, projections, analysis, or policy recommendations from "Box 4. Financial Reforms in Ethiopia and Myanmar." - No numeric values, case findings, scenarios, or policy measures specific to Ethiopia and Myanmar are present in the provided excerpt. *Source: mrlicsea - Box 4. Financial Reforms in Ethiopia and Myanmar .....................................................48* ### 1. Changes in monetary policy frameworks over time may obfuscate ### 1. Changes in monetary policy frameworks over time may obfuscate results ### Evolution of policy frameworks and identification challenges - As many central banks in LICs have been modernizing their monetary policy frameworks, standard statistical procedures may not be successful in identifying the channels of the MTM. - Berg and others (2014a) employ an alternative (narrative) approach to Kenya, Rwanda, Tanzania, and Uganda and find clear evidence of the transmission mechanism in most of the countries, with differences ascribable to the policy regime in place. - In a theoretical setup, Portillo and others (2018) show that monetary policy in place plays a role in determining the strength of the MTM. ### Role of data quality and granularity - The quality and granularity of data may play a key role in whether the effects of monetary policy can be accurately identified. - Studies relying on aggregate data have typically documented a weak bank lending channel in LICs. - Abuka and others (2019) undertake the first analysis of the bank lending channel in a sub-Saharan economy using microdata and show that, in the case of Uganda, results indicate significant real effects. *mrlicsea - 1. Changes in monetary policy frameworks over time may obfuscate* ### 3. The standard empirical methods may not be capable of detecting a ### mrlicsea - 3. The standard empirical methods may not be capable of detecting a ### Limits of standard empirical methods for the MTM in LICs - VAR (vector autoregression) methods typically employed suggest that the MTM may be weak and unreliable in LICs. - Li and others (2016) find that short data samples, measurement error, high-frequency supply shocks, and other LIC features: - may bias estimated effects in LICs; - may undermine the precision of estimates, causing results to appear “insignificant” even when underlying transmission is strong. - Short data samples and measurement errors in LICs may lead to attenuation bias (an underestimation of effects of transmission) when using regression in general (including local projections). ### Role of commodity and external price shocks - Food and oil prices and the exchange rate account for the bulk of inflation dynamics in some LICs (Charry, Gupta, and Thakoor 2014 for Rwanda). - Portillo and Zanna (2018) show first-round effects of international food price shocks depend on asset market structure and cast doubt on the view that international food price shocks are inherently inflationary in LICs. - Nguyen and others (2015): domestic demand pressures have played a larger role in driving inflation in SSA in the last decade; the policy regime helps explain the role of shocks in driving inflation. - Choi and others (2018) show the impact of an oil price shock on inflation in developing countries is not overly large. ### Frontier models tailored for LICs: purposes and findings - Takeaway 3: Frontier models tailored for LICs provide powerful and flexible tools that provide insights about monetary policy design, such as desirable responses to commodity price shocks, the role of monetary aggregates, and exchange rate management. - DFID-IMF collaboration developed modern macroeconomic models reflecting LIC-specific features to examine: - food shocks, - monetary aggregates, - exchange rate management. - Selected model findings: - On food: - Andrle and others (2014) for Kenya: imported food price shocks important for inflation; accommodating monetary policy affected the nominal exchange rate. - Portillo and others (2016): optimal policy prescribes virtually complete stabilization of non-food inflation; food subsistence amplifies welfare losses of policy mistakes. - On monetary aggregates: - Berg, Portillo, and Unsal (2018): model with informational role for monetary aggregates; examines conditions under which adherence to money targets is optimal. - Portillo and others (2018): money-targeting frameworks cause high unintended short-term interest rate volatility and poor communication, reducing policy effectiveness. - Gonçalves (2015): for Kenya, Tanzania, and Uganda, monetary policy respected the Taylor Principle—nominal interest rates, on average, increase more than one-to-one with inflation. - On the exchange rate: - Benes and others (2015): some exchange rate management via foreign exchange interventions within an inflation-targeting context can be welfare improving. - Buffie and others (2018): “leaning against the wind” enhances the efficacy of inflation targeting. - Iyer (2017): benefits of exchange rate flexibility may depend on labor and product market development; a flexible exchange rate can exacerbate currency and factor misalignments in agricultural commodity-exporting economies. - Masson and others (2014): existing monetary unions in Africa seem economically viable; benefits from new or expanded unions are limited due to low regional trade and strong shock and fiscal asymmetries. - Research gaps noted: further investigation of how transmission depends on institutional frameworks, financial development, and banking system concentration. ### Model-based monetary policy analysis and FPAS - Takeaway 4: Model-based monetary policy analysis is critical in developing robust and consistent policy responses and communications in LICs. - The Forecasting and Policy Analysis System (FPAS) includes small macroeconomic models integrating LIC features to produce coherent forecasts, alternative scenarios, and systematic inputs for central bank decisions. - Examples: - Andrle and others (2013): SSA forecasting and policy analysis model with explicit role for money targets and target misses; central role for food prices and global developments; nests money-targeting, interest-rate frameworks, and intermediate cases; applied to Kenya. - Baldini and others (2015) for Zambia: policy lessons include forward-looking policymaking, monitoring banking system developments rather than exclusively reserve money, and acknowledging limits of policy to offset external-shock volatility; systematic forward-looking policymaking can enhance credibility and ameliorate output–inflation trade-offs. - Data constraints: - Models useful even when data are limited; sensitivity analysis and alternative scenarios can address parameter uncertainty. - Economic data in LICs often come as quarterly national accounts available with a lag; FPAS design includes data management processes using partial higher-frequency indicators where available. ### Country uptake, capacity development, and impacts - Takeaway 5: Uptake of model-based monetary policy analysis has translated into significant improvements in analysis, formulation and communication of monetary policy in LIC central banks. - FPAS and background research have anchored IMF engagement with central banks on modernization, through in-house country applications and training. - Country examples: - Kenya: 2013 IMF country report incorporated Andrle and others (2013) model to analyze whether disinflation is supply- or demand-driven; development of forward-looking policy recommendation process underpinned by model-based forecasts and organizational changes in the Central Bank of Kenya. - Ghana: support for medium-term projections and monetary policy advice; customized training enhanced forecasting and communication capacities. - Uganda: model-based outputs provided to monetary policy decision-making committees; regular support for assessing policy stance and preparing inflation forecasts. - Rwanda: Charry, Gupta, and Thakoor (2014) extension showed majority of past target misses explained by monetary policy shocks and instability of money demand. - Capacity-building and regional coordination: - Technical assistance coordinated with AFRITACs and EAC MAC; EAC encouraged FPAS implementation and established a regional modelling and forecasting working group. - Training program for IMF African Department members to use customized FPAS. - In 2020, an online IMF course on Model-Based Monetary Policy Analysis and Forecasting launched. ### IMF institutional engagement and policy frameworks - Takeaway 6: Modernization efforts in monetary policy in LICs should be reflected in IMF program design, surveillance, and policy advice to LICs. - Research under DFID-IMF informed two key IMF policy papers: - IMF 2014a: modification of IMF conditionality on monetary policy in LICs to be more flexible; proposes review-based monetary conditionality framework (monetary policy consultation clauses) with quarterly or semi-annual monetary or inflation bands and formal consultations when deviations occur. - IMF 2015a: guidance on how LICs can adopt forward-looking frameworks that better anchor inflation and promote stability; emphasizes primacy of price stability and medium-term (numerical) inflation targets. - LICs can make rapid progress in modernizing frameworks; progress is endogenous to improvements in policymaking capacity, financial and macroeconomic development, and stability. ### Ongoing agenda and emerging issues - Ongoing work: gauging monetary frameworks across countries and over time; constructing an index of soundness of monetary policy frameworks (Unsal, Papageorgiou, and Garbers forthcoming). - The index serves as: - a diagnostic tool to identify gaps and guide country-specific steps, - a gauge of evolution within countries or for benchmarking, - data for further studies on open monetary policy issues in LICs. - Broad principles for sound frameworks: forward-looking formulation centered on price stability, clear and well-functioning operational frameworks, and timely and effective communications. - Remaining and emerging issues for future work include: - further understanding transmission of monetary policy in LICs; - interaction and policy mix of monetary, macroprudential, exchange rate, and fiscal policies; - adoption of digital currencies; - mitigating cybersecurity risks and climate change; - interactions between monetary policy and inequality, and fiscal–monetary interactions; - focused work on subgroups within LICs (for example, fragile states, disaster-prone countries). ### Gender issues and macroeconomic implications - DFID-IMF collaboration has focused on gender equality and the economy, producing research and operational work incorporated into IMF surveillance and capacity development. - Key findings from country studies and simulation results: - Nigeria: - Closing—for each income group—the gender gap in years of schooling would boost long-term GDP in Nigeria by 5 percentage points. - More education would generate higher wages for women (8 percent), increasing female labor force participation from 76 to 87 percent. - Men’s average wages would not be negatively affected. - Income equality would improve: Gini coefficient would fall by 2 percentage points. - Senegal: - Women tend to receive 30 percent less than men after controlling for characteristics. - Enforcing anti-discrimination policies that drop average gender wage gap by 5 percentage points would increase female labor force participation by 9 percentage points, boost GDP by 5 percent, and increase tax revenues by 1 percent of GDP. - Sierra Leone: - Providing each child with at least lower secondary education could, in the long term, boost GDP by 40 percent. - Closing gender gaps in education across income groups or increasing the quality of education could yield gains of 8 and 27 percent of GDP, respectively. - Lao P.D.R.: - Measures to close the gap in returns to experience and eliminate workplace discrimination could lead to a decrease of the gender pay gap by almost 12 percentage points. - Informality and gender: - Higher female presence in the informal sector is associated with larger gender gaps in education, fewer family planning needs satisfied, and higher rates of early marriage. - In urban Senegal, being a woman increases the probability of working in informality by 8.5 percent; having kids reduces men’s probability of informality but increases women’s. *From the provided IMF DFID-IMF collaboration chapter content.* ### Box 1. Gender Gaps and Informality ### Box 1. Gender Gaps and Informality ### Global trends in gender gaps - Over recent decades, progress toward gender equality has advanced across education, health, economic opportunity, and political empowerment, but progress is uneven across regions. - Regional patterns highlighted: - Girls’ secondary education enrollment rates have stalled since the 2000s in the Middle East, Central Asia, and Africa, while gaps have closed in Europe and the Americas. - Female labor force participation in the Middle East and Central Asia has been persistently low. - South Asia, the Middle East and Central Asia, and sub-Saharan Africa lag other regions on key gender gap indicators despite recording significant improvement. ### Links between gender gaps and economic outcomes - Gender gaps in opportunity (for example, lower educational enrollment rates for girls than boys) constrain the pool of human capital, harming product diversification. - Gender gaps in the labor market reduce the efficiency of the labor force and impede the development of new ideas. - Empirical evidence suggests gender-friendly policies could help countries diversify their economies (Kazandjian and others 2016). ### Gender budgeting: concept and mechanisms - Definition: Gender budgeting means fiscal authorities consider expected outcomes on gender equality and women’s empowerment when designing tax and spending policies, and adapt public financial management to be gender-responsive. - Potential benefits: Well-designed gender budgets can improve the efficiency and equity of the overall budget process and improve gender-related outcomes across education, health, and economic empowerment. ### Empirical examples of gender budgeting impact - Morocco: Gender budgeting is associated with an increase in female primary school enrollment in rural areas by more than 18 percentage points over 10 years (Kolovich and Shibuya 2016). - India: States with gender budgeting efforts have made more progress on gender equality in primary school enrollment than states without (Stotsky and Zaman 2016). ### Findings from the DFID–IMF global study on gender budgeting - Implementation: - Gender budgeting has been implemented by countries across all regions and income levels and at the national, state, and/or local levels. Examples of countries with state and/or local level initiatives include Germany, India, Mexico, Spain, and Uganda. - Leadership and legal frameworks: - The leadership of the ministry of finance is crucial; examples include Afghanistan, Albania, Ecuador, Finland, the Philippines, and Sweden. - Legal requirements matter: Austria, Bolivia, and Rwanda mandate gender budgeting in their constitutions. - Public financial management and institutional roles: - Public financial management institutions enable operationalizing gender-responsive fiscal policies; Ukraine’s effort has been implemented within PFM reforms. - Civil society, line ministry gender units, parliaments, and academia are key players. Examples: United Kingdom’s Women’s Budget Group and Canada’s Alternative Federal Budget. - Coordination challenges exist for gender units in line ministries; political support is particularly important when additional resources and cross-administration efforts are required. - Focus and gaps: - Gender budgeting has typically focused on expenditures and overlooked taxes, even though tax policies are not always gender neutral; discriminatory tax and financial laws remain in many legal systems. - Several countries have incorporated a greater focus on revenues, including Finland, Iceland, India, and Uganda. - Many countries engaged in gender budgeting have not incorporated program or performance budgeting, despite recognition that these practices can improve effectiveness of gender policies. - Data, transparency, and monitoring: - Improvements needed in reporting, transparency, and intergovernmental cooperation. - Gender budgeting statements can enhance transparency. - Collecting gender-disaggregated data is important for better gender-based analysis. - Ex ante impact assessments, ex post monitoring, and gender auditing are common gaps. - Among G7 countries, Japan and France have made the most progress in systematically collecting fiscal data disaggregated by gender. - Korea requires the government to examine the gender impacts of the budget and whether men and women are equally receiving benefits from the budget (taking into account both direct and indirect budget allocation). ### IMF and DFID efforts and tools - To promote gender budgeting globally, the DFID–IMF collaboration launched in 2017 the IMF Gender Portal, described as the first-ever global review of policymakers’ use of tax and spending policies to promote gender equality, including an online database toolkit of gender equality indicators worldwide. ### Key messages from the IMF’s research on gender budgeting - 1. Gender budgeting has been implemented by countries across all regions and income levels and at the national, state, and/or local levels. - 2. The leadership of the ministry of finance is crucial. - 3. Legal requirements for gender budgeting matter. - 4. Public financial management institutions play an enabling role in operationalizing gender-responsive fiscal policies. - 5. Civil society, gender and other ministries, parliaments, and academia are also key players. - 6. Gender budgeting has typically focused on expenditures and overlooked taxes, but tax policies are not always gender neutral. *Source: Box 1. Gender Gaps and Informality, mrlicsea - Box 1. Gender Gaps and Informality (mrlicsea - Box 1. Gender Gaps and Informality)* ### references in chronological order. ### mrlicsea - references in chronological order. ### The Quantitative Macroeconomic Framework - The analytical tool used is the Quantitative Macroeconomic Framework: theory with microeconomic foundations and an aggregate perspective; models are quantitative applications of existing theories calibrated to replicate key macroeconomic patterns. - Two reasons for widespread use: - Treatment-control identification is ill-suited because economywide reforms affect nearly everybody; aggregation of individual behavior creates general equilibrium effects. - Many quantitatively significant factors affect income distribution and interact nonlinearly; calibration (selection of data moments) is used to choose parameter values so the model is “realistic.” - Calibration requires integrated consideration of the research question and model mechanisms; no simple rule of thumb exists. - Models for LICs capture salient characteristics: large agricultural and informal sectors, sizable rural-urban gap, limited financial development, and endogenous distribution of population. ### Key Lessons on Fiscal Instruments (Box 2 findings) - 1. Consumption taxation (for instance, value-added tax) appears to be generally regressive, but its efficiency costs are small. - In LICs, regressiveness is caused by uneven distribution of tax incidence between poor rural areas and rich urban areas due to limited labor mobility and low supply elasticity of rural households. - 2. Labor and capital income taxation (for instance, personal and corporate income taxes) incur higher efficiency costs because they are levied upon small formal sectors; since formal-sector workers on average tend to be richer, income taxation is on average progressive. - 3. Cash transfer programs (for instance, universal basic income) effectively reduce inequality, but they lead to reductions in savings and hence investment since poor people tend to have higher marginal propensity of consumption. - 4. Public infrastructure investment raises overall productivity and compensates efficiency loss with little distributional impacts; sector-specific investment can have distributional implications when labor mobility is limited. General equilibrium effects tend to mitigate impacts by passing some benefits through higher demand. ### Pilot Studies of Fiscal Policy Reforms (Table 1 highlights) - Uganda: Revenue mobilization by VAT, PIT, or CIT; Expansion of public investment — IMF (2015b). - Honduras: Revenue mobilization by VAT; Expansion of cash-transfer — IMF (2016a). - Guatemala: Revenue mobilization by VAT or PIT; Expansion of cash-transfer — IMF (2016b). - Republic of the Congo: Revenue mobilization by VAT; Revenue mobilization by increasing fuel price — IMF (2016c). - Benin: Revenue mobilization by VAT, PIT, or CIT; Expansion of cash-transfer or public investment — IMF (2018c). - Senegal: Revenue mobilization by VAT, PIT, and CIT; Expansion of cash-transfer and public investment — IMF (2019c). ### Case Study: Senegal (Box 3) - Context: Senegal plans to increase tax-to-GDP ratio from 16 percent to the regional target of 20 percent in the West African Economic and Monetary Union to finance public investment. - Reform package: Raise revenue mobilization by value-added tax, corporate income tax, and personal income tax to finance expansions of cash transfer and infrastructure investment programs. - Simulation results (IMF (2019c)): - The package, if successfully implemented, can lead to sizable economic growth (about a 2 percent increase in GDP) with marked benefits to the economically disadvantaged population (Gini coefficient decreases substantially in the rural area). - Box Figure 3.1 variables plotted: GDP, aggregate consumption, aggregate investment, urban income Gini, rural income Gini, total income Gini. - Notes on interpretation: - Consumption taxation is best implemented together with cash transfer programs or in countries where inequality is not high to limit distributional costs. - Income taxation is more suitable to be paired with public investment or adopted in countries with robust economic growth to mitigate efficiency costs. ### Financial Sector Reforms: Development Dimensions and General Insights - Financial system development captured by: breadth (ease of access to credit), depth (amount of collateral required), and efficiency (ability of intermediaries to provide services at low cost). - Cross-country example: Pakistan vs. Bangladesh - Fractions of firms having access to credit: Pakistan 7 percent, Bangladesh 34 percent. - Average collateral requirement measured by loan-to-collateral ratio is 77 percent higher in Bangladesh, suggesting shallower depth. - Four general insights from Dabla-Norris and others (2021): - 1. Financial sector reforms are most effective when the most binding constraint is alleviated; reforms should aim for a well-rounded financial system with no obvious shortages. - 2. Relaxing collateral constraints is more effective in raising output and productivity compared to reducing credit market entry cost or intermediation cost because it expands both extensive and intensive margins. - 3. Reducing credit entry cost and relaxing collateral constraints initially lead to an increase in inequality, but further development along these dimensions eventually pushes inequality down (initial benefits accrue to wealthy borrowers; later benefits reach previously excluded users). - 4. Increasing the efficiency of financial intermediaries always drives inequality higher because relatively rich users of the financial system benefit most; general equilibrium spillovers to workers are small quantitatively. - Financial reforms interact quantitatively significantly with fiscal reforms (Box 4 case studies of Ethiopia and Myanmar). ### Interaction Cases: Ethiopia and Myanmar (Box Figure 4.1) - Ethiopia: - Financial sector underdeveloped; policies fund public enterprises; real deposit rates negative. - Reform: increase deposit rates and reduce share of funds channeled to public sector. - Findings: increasing efficiency of financial intermediaries raises private sector activity and economic growth but causes inequality to rise. - Complementary policy: increasing sectoral labor mobility (for instance by strengthening land rights or providing accessible training and education) mitigates negative distributional effects. - Myanmar: - Labor mobility appears less constrained; financial reforms lead to lower inequality even without complementary labor market interventions. - Box Figure 4.1 plots: Real GDP (left scale), Gini index (right scale), Poverty rate (right scale). *Italic: Source content: mrlicsea - references in chronological order.* ### Box 4. Financial Reforms in Ethiopia and Myanmar ### Box 4. Financial Reforms in Ethiopia and Myanmar ### Globalization: growth and inequality evidence - Lang and Tavares (2018) use the KOF Index of Globalization (Gygli and others 2019) as the measure of globalization, an index that aggregates a country’s openness along 14 prominent dimensions. - Findings: - There is a positive but diminishing effect of globalization on growth: at the average globalization level of low-income countries (Nigeria), increasing the globalization index by one point (which is half of its average annual change) is estimated to increase the five-year growth rate by about 2 percentage points. - The growth effect fades completely when the globalization level reaches that of Australia, Chile, or Poland. - Using the Gini coefficient as a proxy for inequality, a one-point increase in the globalization index would lead to one-third of a point increase in the Gini coefficient. - Distributional mechanism: average income in each income decile increases following globalization, but the rich benefit nearly three times more than the poor. - Net implication: globalization narrows cross-country income disparity but worsens within-country income distribution; there is no evidence that any income group is systematically hurt, and globalization appears to contribute to poverty reduction. ### Capital account liberalization and rising inequality - Measurement and episodes: - Capital account openness measured using the Chinn-Ito index. - Liberalization episodes defined where the annual change of the index is larger than two standard deviations of its average level; such episodes are associated with a contemporaneous increase in capital flows of about 5 percent of GDP. - Distributional effects (Furceri and Loungani 2018): - Immediate increase of the Gini coefficient by about 0.8 percent in one year after liberalization. - Cumulative increase five years after the episodes rises to about 1.4 percent. - Role of financial inclusion: - High degree of financial inclusion: Gini increases in short term but returns to its original level in about five years. - Low degree of financial inclusion: distribution worsens over time, with the Gini remaining elevated. ### Key messages going forward - For policymakers: - There is evidence that globalization leads to higher economic growth. It has also created challenges for financing public expenditure in LICs and opens doors for redistributive policies to let the benefits of growth reach a wider population. - Macro-structural policies can have important distributional consequences in LICs. A comprehensively designed fiscal reform package needs integrated consideration of taxation and spending instruments. - Modern analytical tools can greatly improve policymakers’ ability to identify the most binding frictions and distortions in the economy; they can be very useful in gauging the macroeconomic and distributional impacts of potential reforms prior to implementation. - Caveat: the surveyed studies do not examine how interventions can best be implemented in practice in the presence of weak domestic administrative capacity or political economy constraints; the actual cost-benefit of a reform should consider both theoretically predicted impacts and practical implementation issues. - For researchers: - LIC economies differ substantially from advanced economies; establishing an appropriate benchmark growth model for LICs should be a research priority. - Researchers should develop analytical tools suitable for other macro-critical issues in LICs, such as regional integration, labor market mobility, and public debt. - Macroeconomic and microeconomic research should join forces to better profile impacts of proposed policy reforms. ### Diversification: rationale, benefits, and policy implications - Motivation and payoffs: - Export and output diversification are central to policy debates because many LICs depend on a narrow range of primary products and a small number of export markets. - Diversification yields both a growth payoff and a stability payoff: it enables resource reallocation to more productive uses, supports expansion into higher value-added sectors, and can reduce output volatility—especially by reducing reliance on products with volatile prices. - Diversification is associated with lower income and gender inequality, higher innovation and foreign direct investment, and a larger number of businesses. - Dimensions: - Export diversification (new products or trading partners) and output diversification (domestic production processes). - Horizontal diversification: move into new higher value-added sectors. - Vertical diversification (quality upgrading): produce higher quality varieties within existing sectors. - Successful country experiences (selected facts): - Malaysia: over four decades, GDP per capita rose 17 times; exports of goods and nonfactor services increased from about 40 percent of GDP in the early 1970s to more than 100 percent in the mid-2000s. - Vietnam: GDP per capita rose nearly five times in 20 years; exports of goods and services rose from about one-third of GDP to 86 percent of GDP; agricultural sector declined from 32 percent of GDP in 1990 to 16 percent in 2011; industry and construction rose from 25 percent of GDP to 42 percent over the same period. - IMF analytical work and tools: - DFID-IMF collaborations produced analytical outputs including a Staff Discussion Note, a Board Paper, two data toolkits (one on export diversification and one on export quality), data sets on service exports and commodity terms of trade, and an Export Diversification Database covering 1962–2014. - An internal IMF survey found that during 2014–18, IMF economists produced approximately 140 pieces of single and cross-country analyses related to diversification covering 59 developing countries; nearly half used the above-mentioned data toolkits. - Drivers and policy levers: - Factors associated with higher diversification: macroeconomic stability, access to credit, good infrastructure, a conducive regulatory environment, a skilled workforce, and income equality. - Policy priorities for diversification: human capital accumulation, reducing barriers to trade (especially for commodity-exporting countries), financial sector development, and gender-friendly policies to alleviate gaps in human capital accumulation and resource allocation. - Country-specific approaches: build on starting point and endowments; for countries with large agricultural employment shares, encourage greater value-addition in agriculture; oil-exporting countries should pursue financial and fiscal diversification alongside output and export diversification. - State role: policies should support creation and development of dynamic export sectors while aligning incentives for firms and workers to enter these sectors. *Source: Box 4. Financial Reforms in Ethiopia and Myanmar, mrlicsea - Box 4. Financial Reforms in Ethiopia and Myanmar* ### References ### mrlicsea - References ### Reference list - Andrle, Michal, Andrew Berg, Enrico G. Berkes, Rafael A. Portillo, Jan Vlcek, and R. Armando Morales. 2013. “Money Targeting in a Modern Forecasting and Policy Analysis System: An Application to Kenya.” IMF Working Paper 13/239, International Monetary Fund, Washington, DC. - Andrle, Michal, Andrew Berg, R. Armando Morales, Rafael A. Portillo, and Jan Vlcek. 2014. “On the Sources of Inflation in Kenya: A Model-Based Approach.” South African Journal of Economics 83 (4): 475–505. - Angrist, Joshua D., and Jörn-Steffen Pischke. 2009. Mostly Harmless Econometrics: An Empiricist’s Companion. New Jersey: Princeton University Press. - Atolia, Manoj, Bin Grace Li, Ricardo Marto, and Giovanni Melina. 2017. “Investing in Public Infrastructure: Roads or Schools?” IMF Working Paper 17/105, International Monetary Fund, Washington, DC. - Atolia, Manoj, Prakash Loungani, Milton Marquis, and Chris Papageorgiou. 2020. “Rethinking Development Policy: What Remains of Structural Transformation?” World Development 128: 1–13. - Auten, Gerald, and David Splinter. 2019. “Income Inequality in the United States: Using Tax Data to Measure Long-term Trends.” Unpublished. http:// davidsplinter .com/ AutenSplinter -Tax _Data _and _Inequality .pdf. - Baldini, Afredo, Jaromir Benes, Andrew Berg, Mai C. Dao, and Rafael A. Portillo. 2015. “Monetary Policy in Low Income Countries in the Face of The Global Crisis: A Structural Analysis.” Pacific Economic Review 20(1): 149–92. - Banerjee, Abhijit V., and Esther Duflo. 2003. “Inequality and Growth: What Can the Data Say?” Journal of Economic Growth 8: 267–99. - Benes, Jaromir, Andrew Berg, Rafael A. Portillo, and David Vavra. 2015. “Modeling Sterilized Interventions and Balance Sheet Effects of Monetary Policy in a New-Keynesian Framework.” Open Economies Review 36 (1): 81–108. - Berg, Andrew, Luisa Charry, Rafael A. Portillo, and Jan Vlcek. 2014a. “The Monetary Transmission Mechanism in the Tropics: A Narrative Approach.” IMF Working Paper 13/197, International Monetary Fund, Washington, DC. - Berg, Andrew, Stephen A. O’Connell, Catherine Pattillo, Rafael A. Portillo, and D. Filiz Unsal. 2014b. “Monetary Policy Issues in Sub-Saharan Africa.” In The Oxford Handbook of Africa and Economics: Volume 2: Policies and Practices, edited by Célestin Monga and Justin Yifu Lin. Oxford, New York: Oxford University Press. - Berg, Andrew, and Jonathan D. Ostry. 2017. “Inequality and Unsustainable Growth: Two Sides of the Same Coin?” IMF Economic Review 65 (4): 792–815. - Berg, Andrew, Jonathan D. Ostry, and Jeromin Zettelmeyer. 2012. “What Makes Growth Sustained?” Journal of Development Economics 98 (2): 149–66. - Berg, Andrew, Jonathan D. Ostry, Jeromin Zettelmeyer, and Yorbol Yakhshilikov. 2018. “Redistribution, inequality, and growth: new evidence.” Journal of Economic Growth 23: 259–305. - Berg, Andrew, and Rafael A. Portillo. 2018. Monetary Policy in Sub-Saharan Africa. Oxford, New York: Oxford University Press. - Berg, Andrew, Rafael A. Portillo, and D. Filiz Unsal. 2018. “On the Role of Money Targets in the Monetary Policy Framework in SSA.” In Monetary Policy in Sub-Saharan Africa, edited by Andrew Berg and Rafael A. Portillo. Oxford, New York: Oxford University Press. - Besley, Timothy, and Torsten Persson. 2013. “Taxation and Development.” In Handbook of Public Economics, volume 5, edited by Alan J. Auerbach, Raj Chetty, Martin Feldstein, and Emmanuel Saez. North Holland: Elsevier B.V. - Blotevogel, Robert, Eslem Imamoglu, Kenji Moriyama, and Babacar Sarr. 2020. “Measuring Income Inequality and Implications for Economic Transmission Channels.” IMF Working Paper 20/164, International Monetary Fund, Washington, DC. - Brandao-Marques, Luis, R. G. Gelos, Thomas Harjes, Ratna Sahay, and Yi Xue. 2020. “Monetary Policy Transmission in Emerging Markets and Developing Economies.” IMF Working Paper 20/35, International Monetary Fund, Washington, DC. - Broccolini, Chiara, Giulia Lotti, Alessandro Maffioli, Andrea F. Presbitero, and Rodolfo Stucchi. 2020. “Mobilization Effects of Multilateral Development Banks.” Policy Research Working Paper 9163, World Bank, Washington, DC. - Buffie, Edward, Marco Airaudo, and Luis-Felipe Zanna. 2018. “Inflation Targeting and Exchange Rate Management in Less Developed Countries.” Journal of International Money and Finance 81: 159–81. - Buffie, Edward, Andrew Berg, Catherine Pattillo, Rafael Portillo, and Luis-Felipe Zanna. 2012. “Public Investment, Growth, And Debt Sustainability: Putting Together the Pieces.” IMF Working Paper 12/144, International Monetary Fund, Washington, DC. - Buffie, Edward, Luis-Felipe Zanna, Christopher Adam, Lacina Balma, Dawit Tessema, Kangni R. Kpodar. 2020. “Debt, Investment, and Growth in Developing Countries with Segmented Labor Markets." IMF Working Paper 20/102, International Monetary Fund, Washington, DC. - Burgess, Robin, and Nicholas Stern. 1993. “Taxation and Development.” Journal of Economic Literature 31 (2): 762–830. - Callen, Tim, Reda Cherif, Fuad Hasanov, Amgad Hegazy, and Padamja Khandelwal. 2014. “Economic Diversification in the GCC: Past, Present, and Future.” IMF Staff Discussion Note 14/12, International Monetary Fund, Washington, DC. - Cantelmo, Alessandro, N. Fatouros, Giovanni Melina, and Chris Papageorgiou. 2019. “Monetary Policy in Disaster-Prone Developing Countries.” IMF Working Paper 19/217, International Monetary Fund, Washington, DC. - Cerdeiro, Diego A., and Dmitry Plotnikov. 2017. “Taking Stock: Who Benefited from the Oil Price Shocks?” IMF Working Paper 17/104, International Monetary Fund, Washington, DC. - Cerra, Valerie, Ruy Lama, and Norman Loayza. 2021 (forthcoming). “Links between Growth Inequality, and Poverty: A Survey.” In How to Achieve Inclusive Growth, edited by Valerie Cerra, Barry Eichengreen, Asmaa A. El-Ganainy, and Martin Schindler. New York and Oxford: Oxford University Press. - Charry, Luisa, Pranav Gupta, and Vimal Thakoor. 2014. “Introducing a Semi-Structural Macroeconomic Model for Rwanda.” IMF Working Paper 14/159, International Monetary Fund, Washington, DC. - Cherif, Reda, and Fuad Hasanov. 2016. “Soaring of the Gulf Falcons: Diversification in the GCC Oil Exporters in Seven Propositions.” In Breaking the Oil Spell: The Gulf Falcons’ Path to Diversification, edited by Reda Cherif, Fuad Hasanov, and Min Zhu. Washington, DC: International Monetary Fund. - Cherif, Reda, Fuad Hasanov, and Min Zhu. 2016. Breaking the Oil Spell: The Gulf Falcons’ Path to Diversification. Washington, DC: International Monetary Fund. - Chetty, Raj, John N. Friedman, Nathaniel Hendren, Michael Stepner, and the Opportunity Insights Team. 2020. “The Economic Impacts of COVID-19: Evidence from a New Public Database Built Using Private Sector Data.” Unpublished. https:// opportunityinsights .org/ wp -content/ uploads/ 2020/ 05/ tracker _paper .pdf. - Chinn, Menzie D., and Hiro Ito. 2006. “What Matters for Financial Development? Capital Controls, Institutions, and Interactions.” Journal of Development Economics 81 (1): 163–92. - Chinn, Menzie D., and Hiro Ito. 2008. “A New Measure of Financial Openness.” Journal of Comparative Policy Analysis: Research and Practice 10 (3): 309–22. - Choi, Sangyup, Davide Furceri, Prakash Loungani, Saurabh Mishra, and Marcos Poplawski-Ribeiro. 2018. “Oil Prices and Inflation Dynamics: Evidence from Advanced and Developing Economies.” Journal of International Money and Finance 82 (C): 71–96. - Cugat, Gabriela, and Futoshi Narita. 2020. “Inclusiveness in Emerging Market and Developing Economies and the Impact of COVID-19.” In World Economic Outlook, International Monetary Fund, Washington, DC, October. - Dabla-Norris, Era, Kalpana Kochhar, Frantisek Ricka, Nujin Suphaphiphat, and Evridiki Tsounta. 2015. “Causes and Consequences of Income Inequality: A Global Perspective.” IMF Staff Discussion Note 15/13, International Monetary Fund, Washington, DC. - Dabla-Norris, Era, Alun Thomas, Rodrigo Garcia-Verdu, and Yingyuan Chen. 2013. “Benchmarking Structural Transformation Across the World.” IMF Working Paper 13/176, International Monetary Fund, Washington, DC. - Dabla-Norris, Era, Robert M. Townsend, Yan Ji, and D. Filiz Unsal. 2021. “Distinguishing Constraints on Financial Inclusion and Their Impact on GDP, TFP, and the Distribution of Income.” Journal of Monetary Economics 117: 1–18. - Deléchat, Corinne, John W. Clark Jr, Pranav Gupta, Malangu Kabedi-Mbuyi, Mesmin Koulet-Vickot, Carla Macario, Toomas Orav, Manuel Rosales Torres, Rene Tapsoba, Dmitry Zhdankin, and SusanYang. 2015. “Harnessing Resource Wealth for Inclusive Growth in Fragile States.” IMF Working Paper 15/25, International Monetary Fund, Washington, DC. - Domeij, David, and Jonathan Heathcote. 2004. “On the Distributional Effects of Reducing Capital Taxes.” International Economic Review 45 (2): 523–54. - Donaldson, Dave. 2015. “The Gains from Market Integration.” Annual Review of Economics 7: 619–47. - Donaldson, Dave. 2018. “Railroads of the Raj: Estimating the Impact of Transportation Infrastructure.” American Economic Review 108 (4–5): 899–934. - Dutt, Pushan, Ilian Mihov, and Timothy Van Zandt. 2008. “Trade Diversification and Economic Development.” Unpublished, INSEAD. https:// faculty .insead .edu/ pushan -dutt/ documents/ diversification .pdf. - Easterly, William. 2007. “Inequality Does Cause Underdevelopment: Insights from a New Instrument.” Journal of Development Economics 84 (2): 755–76. - Economist, The. 2019. “Economists Are Rethinking the Numbers on Inequality.” Briefing, November 28. https:// www .economist .com/ briefing/ 2019/ 11/ 28/ economists -are -rethinking -the -numbers -on -inequality. - Fabrizio, Stefania, Anna Fruttero, Daniel Gurara, Lisa Kolovich, Vivian Malta, Marina M. Tavares, and Nino Tchelishvili. 2020. “Women in the Labor Force: The Role of Fiscal Policies.” IMF Staff Discussion Note 20/03, International Monetary Fund, Washington, DC. - Fabrizio, Stefania, Davide Furceri, Rodrigo Garcia-Verdu, Bin Grace Li, Sandra V. Lizarazo, Marina M. Tavares, Futoshi Narita, and Adrian Peralta-Alva. 2017. “Macro-structural Policies and Income Inequality in Low-income Developing Countries.” IMF Staff Discussion Note 17/01, International Monetary Fund, Washington, DC. - Francis, Bill, Iftekhar Hasan, and Yun Zhu. 2016. “Diversification and the Economy: The Role of Government in Enhancing the Industrial Base.” In Breaking the Oil Spell: The Gulf Falcons’ Path to Diversification, edited by Cherif, Reda, Fuad Hasanov, and Min Zhu. Washington, DC: International Monetary Fund. - Furceri, Davide, Swarnali A. Hannan, Jonathan David Ostry, and Andrew K. Rose. 2019. “Macroeconomic Consequences of Tariffs.” IMF Working Paper 19/9, International Monetary Fund, Washington, DC. - Furceri, Davide, and Prakash Loungani. 2018. “The Distributional Effects of Capital Account Liberalization.” Journal of Development Economics 130: 127–44. - Furceri, Davide, Prakash Loungani, and Jonathan David Ostry. 2019. “The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data.” Journal of Money, Credit and Banking 51 (S1): 163–98. - Furceri, Davide, Prakash Loungani, Jonathan D. Ostry, and Pietro Pizzuto. 2020. “Will COVID-19 Affect Inequality? Evidence from Past Pandemics.” Covid Economics 12: 138–57. - Galasso, Vincenzo. 2020. “Covid: Not a Great Equaliser.” CESifo Economic Studies 2020: 1–17. - Gaspar, Vitor, David Amaglobeli, Mercedes Garcia-Escribano, Delphine Prady, and Mauricio Soto. 2019. “Fiscal Policy and Development: Human, Social, and Physical Investments for the SDGs.” IMF Staff Discussion Note 19/03, International Monetary Fund, Washington, DC. - Georgieva, Kristalina, Stefania Fabrizio, Cheng Hoon Lim, and Marina M. Tavares. 2020. “The COVID-19 Gender Gap.” IMF Blog, International Monetary Fund, Washington, DC. https:// blogs .imf .org/ 2020/ 07/ 21/ the -covid -19 -gender -gap/ . - Giri, Rahul, Saad Quayyum, and Rujun Yin. 2019. “Understanding Export Diversification: Key Drivers and Policy Implications.” IMF Working Paper 19/105, International Monetary Fund, Washington, DC. - Goldberg, Pinelopi Koujianou, and Nina Pavcnik. 2007. “Distributional Effects of Globalization in Developing Countries.” Journal of Economic Literature 45 (1): 39–82. - Gonçalves, Carlos E. 2015. “Taylor Visits Africa.” IMF Working Paper 15/258, International Monetary Fund, Washington, DC. - Gruss, Bertrand, and Suhaib Kebhaj. 2019. “Commodity Terms of Trade: A New Database.” IMF Working Paper 19/21, International Monetary Fund, Washington, DC. - Gurara, Daniel, Andrea Presbitero, and Miguel Sarmiento. 2020. “Borrowing Costs and the Role of Multilateral Development Banks: Evidence from Cross-Border Syndicated Bank Lending.” Journal of International Money and Finance 100 (February): 1–18. - Gygli, Savina, Florian Haelg, Niklas Potrafke, and Jan-Egbert Sturm. 2019. “The KOF Globalisation Index—Revisited.” The Review of International Organizations 14 (3): 543–74. - Harrison, Ann, John McLaren, and Margaret McMillan. 2011. “Recent Perspectives on Trade and Inequality.” Annual Review of Economics 3: 261–89. - Henn, Christian, Chris Papageorgiou, Jose Manuel Romero, and Nikola Spatafora. 2020. “Export Quality in Advanced and Developing Economies: Evidence from a New Data Set.” IMF Economic Review 68: 421–51. - International Monetary Fund (IMF). 2011. “Revenue Mobilization in Developing Countries.” IMF Policy Paper, International Monetary Fund, Washington DC. - International Monetary Fund (IMF). 2013a. “Republic of Kazakhstan Selected Issues.” IMF Country Report 13/291, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2013b. “Mozambique Staff Report.” IMF Country Report 13/200, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2014a. “Conditionality in Evolving Monetary Policy Regimes.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2014b. “Macroeconomic Developments in Low-Income Developing Countries: 2014 Report.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2014c. “Sustaining Long-Run Growth and Macroeconomic Stability in Low-Income Countries—The Role of Structural Transformation and Diversification.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2015a. “Evolving Monetary Policy Frameworks in Low-Income and Other Developing Countries.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2015b. “Evolving Monetary Policy Frameworks in Low-Income and Other Developing Countries — Background Paper — Country Experiences.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2015c. “Long-Run Growth in Latin America and the Caribbean: The Role of Economic Diversification and Complexity.” In Regional Economic Outlook: Sub-Saharan Africa. Washington, DC: International Monetary Fund, April. - International Monetary Fund (IMF). 2016a. “Botswana Staff Report.” IMF Country Report 16/103, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2016b. “Macroeconomic Prospects and Challenges in Low-Income Developing Countries—2016.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2016c. “Recent Developments and Prospects.” In World Economic Outlook. Washington, DC, April. - International Monetary Fund (IMF). 2016d. “Sub-Saharan Africa: Multi-speed Growth.” In Regional Economic Outlook: Sub-Saharan Africa. Washington, DC, October. - International Monetary Fund (IMF). 2017a. “Economic Diversification in Sub-Saharan Africa.” In Regional Economic Outlook: Sub-Saharan Africa. Washington, DC, October. - International Monetary Fund (IMF). 2017b. “Macroeconomic and Distributional Implications of Financial Reforms in Myanmar.” In Myanmar: Selected Issues Papers. Washington, DC: International Monetary Fund. - International Monetary Fund (IMF). 2017c. “MENAP Oil Exporters: Need to Push ahead with Fiscal Consolidation and Diversification.” In Regional Economic Outlook: Middle East and Central Asia. Washington, DC, October. - International Monetary Fund (IMF). 2017d. “MENAP Oil Importers: Securing Resilience and Inclusive Growth.” In Regional Economic Outlook: Middle East and Central Asia, Washington, DC, October. - International Monetary Fund. 2017e. “Rwanda Selected Issues.” IMF Country Report 17/214, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2018a. “Domestic Revenue Mobilization in Sub-Saharan Africa: What Are the Possibilities?” In Regional Economic Outlook: Sub-Saharan Africa. Washington, DC, April. - International Monetary Fund (IMF). 2018b. “How to Operationalize Gender Issues in Country Work.” IMF Policy Paper, Washington, DC. - International Monetary Fund (IMF). 2018c. “Macro-structural Policies and Inequality.” In Benin: Selected Issues Papers. Washington, DC: International Monetary Fund. - International Monetary Fund (IMF). 2018d. “Review of 1997 Guidance Note on Governance—A Proposed Framework for Enhanced Fund Engagement.” International Monetary Fund, Washington, DC: - International Monetary Fund (IMF). 2018e. “Senegal Selected Issues.” IMF Country Report 19/28, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2019a. “Lao People’s Democratic Republic Staff Report.” IMF Country Report 19/267, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2019b. “Nigeria Selected Issues.” IMF Country Report 19/93, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2019c. “Revenue Mobilization and Inequality in Senegal.” In Senegal: Selected Issues Papers. Washington, DC: International Monetary Fund. - International Monetary Fund (IMF). 2019d. “The Macro-inequality Toolkit.” https:// github .com/ IMFInequality/ inequality. - International Monetary Fund (IMF). 2020a. “A Long and Difficult Ascent.” In World Economic Outlook. Washington, DC, October. - International Monetary Fund (IMF). 2020b. “Boosting Human Capital, Accelerating Development, and Lowering Inequality in Sierra Leone.” IMF Country Report 20/117, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2020c. “Toward an Integrated Policy Framework.” IMF Policy Paper, Washington, DC. - Iyer, Tara. 2017. “Exchange Rate Choices with Inflexible Markets and Costly Price Adjustments.” IMF Working Paper 17/154, International Monetary Fund, Washington, DC. - Johnson, Paul, and Chris Papageorgiou. 2020. “What Remains of Cross-Country Convergence?” Journal of Economic Literature 58 (1): 129–75. - Kazandjian, Romina, Lisa Kolovich, Kalpana Kochhar, and Monique Newiak. 2016. “Gender Equality and Economic Diversification.” IMF Working Paper 16/140, International Monetary Fund, Washington, DC. - Keen, Michael. 2012. “Taxation and Development—Again.” IMF Working Paper 12/220, International Monetary Fund, Washington, DC. - Kolovich, Lisa, and Sakina Shibuya. 2016. “Middle East and Central Asia: A Survey of Gender Budgeting Efforts.” IMF Working Paper 16/151, International Monetary Fund, Washington, DC. - Krogstrup, Signe, and William Oman, 2019. “Macroeconomic and Financial Policies for Climate Change Mitigation: A Review of the Literature.” IMF Working Paper 19/185, International Monetary Fund, Washington, DC. - Kuznets, Simon. 1955. “Economic Growth and Income Inequality.” American Economic Review 45: 1–28. - Lang, Valentin F., and Marina Mendes Tavares. 2018. “The Distribution of Gains from Globalization.” IMF Working Paper 18/54, International Monetary Fund, Washington, DC. - Laxton, Douglas, Alasdair Scott, and David Rose. 2009. “Developing a Structured Forecasting and Policy Analysis System to Support Inflation-Forecast Targeting (IFT).” IMF Working Paper 2009/065, International Monetary Fund, Washington, DC. - Lea, Nick. 2017. “The Case for Tradable Growth.” Vox Opinion. https:// voxdev .org/ topic/ firms -trade/ opinion -case -tradable -growth. - Lea, Nick, and Joanna McGowan. 2015. “Income Inequality and the Distribution of Opportunity.” United Kingdom Department for International Development, Chief Economist’s Office, London. - Lee, Dongyeol, and Huan Zhang. 2019. “Export Diversification in Low-Income Countries and Small States: Do Country Size and Income Level Matter?” IMF Working Paper 19/105, International Monetary Fund, Washington, DC. - Li, Bin Grace, Stephen A. O’Connell, Christopher S. Adam, Andrew Berg, and Peter J. Montiel. 2016. “VAR meets DSGE: Uncovering the Monetary Transmission Mechanism in Low-Income Countries.” IMF Working Paper 16/90, International Monetary Fund, Washington, DC. - Loungani, Prakash, Saurabh Mishra, Chris Papageorgiou, and Ke Wang. 2017. “World Trade in Services: Evidence from A New Dataset.” IMF Working Paper 17/77, International Monetary Fund, Washington, DC. - Malta, Vivian, Lisa Kolovich, Angelic Martinez, and Marina Mendes Tavares. 2019. “Informality and Gender Gaps Going Hand in Hand.” IMF Working Paper 19/112b, International Monetary Fund, Washington, DC. - Malta, Vivian, Angelica Martinez, and Marina Mendes Tavares. 2019. “A Quantitative Analysis of Female Employment in Senegal.” IMF Working Paper 19/241, International Monetary Fund, Washington, DC. - Mancini-Griffoli, Tommaso, Maria Soledad Martinez Peria, Itai Agur, Anil Ari, John Kiff, Adina Popescu, and Celine Rochon. 2018. “Casting Light on Central Bank Digital Currency.” IMF Staff Discussion Note 18/08, International Monetary Fund, Washington, DC. - Marto, Ricardo, Chris Papageorgiou, and Vladimiir Klyuev. 2017. “Building Resilience to Natural Disasters: An Application to Small Developing States.” IMF Working Paper 17/223, International Monetary Fund, Washington, DC. - Masson, Paul, Catherine Pattillo, and Xavier Debrun. 2014. “The Future of African Monetary Geography.” In The Oxford Handbook of Africa and Economics: Volume 2: Policies and Practices. Edited by Celestin Monga and Justin Yifu Lin. New York and Oxford: Oxford University Press. - McIntyre, Arnold, Mike Xin Li, Ke Wang, and Hanlei Yun. 2018. “Economic Benefits of Export Diversification in Small States.” IMF Working Paper 18/86, International Monetary Fund, Washington, DC. - Melina, Giovanni, Shu-Chun S. Yang, and Luis-Felipe Zanna. 2014. “Debt Sustainability, Public Investment and Natural Resources in Developing Countries: The DIGNAR Model.” IMF Working Paper 14/50, International Monetary Fund, Washington, DC. - Nigeria Demographic and Health Survey. 2013. Abuja, Nigeria, and Rockville, Maryland, USA: National Population Commission and ICF International. - Nguyen, Ahn D. M., Jemma Dridi, Filiz D. Unsal, and Oral Williams. 2015. “On the Drivers of Inflation in Sub-Saharan Africa.” IMF Working Paper 15/189, International Monetary Fund, Washington, DC. *Source: mrlicsea - References.* ### References ### References ### Bibliographic entries - Ostry, Jonathan D., Andrew Berg, and Charalambos G. Tsangarides. 2014. “Redistribution, Inequality, and Growth.” IMF Staff Discussion Note 14/02, International Monetary Fund, Washington, DC. - Ostry, Jonathan D., Prakash Loungani, and Andrew Berg. 2019. Confronting Inequality. New York: Columbia University Press. - Palomino, Juan C., Juan G. Rodríguez, and Raquel Sebastian. 2020. “Wage Inequality and Poverty Effects of Lockdown and Social Distancing in Europe.” Covid Economics 125: 103564. - Papageorgiou, Chris, and Nikola Spatafora. 2012. “Economic Diversification in LICs: Stylized Facts and Macroeconomic Implications.” IMF Staff Discussion Note 12/13, International Monetary Fund, Washington, DC. - Papageorgiou, Chris, Nikola Spatafora, and Ke Wang. 2015. “Diversification, Growth, and Volatility in Asia.” Policy Research Working Paper 7380, World Bank, Washington, DC. - Peralta-Alva, Adrian, Xuan Song Tam, Xin Tang, and Marina Mendes Tavares. 2019. “The Welfare Implications of Fiscal Consolidations in Low-income Countries.” IMF Working Paper 18/146, International Monetary Fund, Washington, DC. - Persson, Torsten, and Guido Tabellini. 1994. “Is Inequality Harmful for Growth?” American Economic Review 84 (3): 600–21. - Piketty Thomas, Emmanuel Saez, and Gabriel Zucman. 2018. “Distributional National Accounts: Methods and Estimates for the United States.” Quarterly Journal of Economics 133 (2): 553–609. - Portillo, Rafeal A., Filiz Unsal, Stephen O’Connell, and Catherine Pattillo. 2018. “Implementation Errors and Incomplete Information: Implications for the Effects of Monetary Policy in Low-Income Countries.” In Monetary Policy in Sub-Saharan Africa, edited by Andrew Berg and Rafael A. Portillo. Oxford, New York: Oxford University Press. - Portillo, Rafael A., Luis-Felipe Zanna, Stephen A. O’Connell, and Richard Peck. 2016. “Implications of Food Subsistence for Monetary Policy and Inflation.” IMF Working Paper 16/70, International Monetary Fund, Washington, DC. - Portillo, Rafael A., and Luis-Felipe Zanna. 2018. “On the First-Round Effects of International Food Price Shocks.” In Monetary Policy in Sub-Saharan Africa, edited by Andrew Berg and Rafael A. Portillo. Oxford, New York: Oxford University Press. - Shibata, Ippei. 2020. “The Distributional Impact of Recessions: The Global Financial Crisis and the Pandemic Recession.” IMF Working Paper 20/96, International Monetary Fund, Washington, DC. - Stotsky, Janet G., Sakina Shibuya, Lisa Kolovich, and Suhaib Kebhaj. 2016. “Trends in Gender Equality and Women’s Advancement.” IMF Working Paper 16/21, International Monetary Fund, Washington, DC. - Stotsky, Janet G., and Asad Zaman. 2016. “The Influence of Gender Budgeting in Indian States on Gender Inequality and Fiscal Spending.” IMF Working Paper 16/227, International Monetary Fund, Washington, DC. - Sugimoto, Cassidy R., and Vincent Larivière. 2018. Measuring Research: What Everyone Needs to Know. What Everyone Needs to Know. Oxford, New York: Oxford University Press. - Unsal, Filiz, Chris Papageorgiou, and Hendre Garbers. Forthcoming. “Monetary Policy Frameworks: An Index and New Evidence.” - Winters, L. Alan, Neil McCulloch, and Andrew McKay. 2004. “Trade Liberalization and Poverty: The Evidence So Far.” Journal of Economic Literature 42 (1): 72–115. *Document: References (mrlicsea - References).* --- _Source: https://www.imf.org/-/media/files/publications/dp/2021/english/mrlicsea.pdf_