## June 2022

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**Canonical URL:** [June 2022](https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/jun2022.pdf)

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### Building Resilience to Natural Disasters (Dominica)
- Publication: Selected Issues Paper by Marina Mendes-Tavares, Wei Guo, and Alejandro Guerson.
- Method: multi-sector general equilibrium model.
- Findings:
  - Investing in resilience capital is efficient despite its high economic cost.
  - The financial instrument used to mobilize revenue matters for returns.
  - Financing resilience with donors' support or by cutting unproductive government spending yields a higher return than financing via distortionary taxes.

### Towards More Gender Equality in Kenya
- Publication: Selected Issues Paper by Mame Astou Diouf, Vivian Malta, and Francine Nyankiye.
- Method: general equilibrium model.
- Findings and policy-relevant conclusions:
  - Greater gender equality would generate substantial macroeconomic and socioeconomic benefits.
  - Gender gaps analyzed include education, access to health services, employment, earnings, and financial inclusion.
  - Legal provisions and customary and religious practices that reinforce gender gaps are assessed.
  - Policies aimed at reducing the educational gender gap and discrimination in the informal sector have the largest positive effects.
  - The paper provides policy advice to increase policy efficiency and to prevent the COVID-19 crisis from eroding recent gains toward gender equality.

### Training Course on Macroeconomics of Climate Change
- Event: Virtual training "Macroeconomics of Climate Change (AT22.24v)" held on April 20, 2022.
- Organizers: African Training Institute (ATI) collaborating with IMF departments (FAD, ICD, RES).
- Content presented: overview of the DIGNAD model of resilience to natural disasters, example application to a disaster-prone country, and policy trade-offs in building climate resilience.
- Participation and feedback:
  - Attendees included country officials from a wide range of sub-Saharan African countries, including 20 low-income countries.
  - Participants engaged actively and expressed appreciation for the presentation.

### What Explains Remittance Fees? Panel Evidence
- Publication: Working Paper by Thorsten Beck, Mathilde Janfils, and Kangni R Kpodar.
- Data: 365 corridors.
- Findings:
  - General reduction in remittance fees over the past decade, but the goal of fees below 3 percent has not been met in many corridors.
  - Cost- and risk-based constraints and market structure are barriers to lower fees.
  - Higher transaction costs from a more rural sending-country population and lower scale can explain high fees.
  - Corridors dominated by banks and few players have higher fees.
  - Easier geographic access to financial institutions, exchange rate stability, and cashless transactions are associated with lower fees.
- Policy implication: Structural factors limit how low fees can go, but there remains some scope for policymakers to act.

### Trade and the COVID-19 Pandemic: Lessons from French Firms
- Publication: Working Paper by Mariya Brussevich, Chris Papageorgiou, and Pauline Wibaux.
- Data: granular customs data on trade flows between France and partners in AEs, EMs, and LIDCs for 2020.
- Findings:
  - Early pandemic response by firms was mainly a reduction in trade volumes (intensive margin) rather than exit from markets (extensive margin).
  - Adjustment along the extensive margin mattered more for trade with EMs and LIDCs.
  - Lockdowns had a stronger impact on final consumer goods; trade recovery was predominantly demand-driven.
  - Firms that were more automated, inventory-intensive, older, and medium-sized were more insulated from the shock.
  - Reliance on air transportation amplified the shock.
  - Trade bans and promotion measures had little impact on aggregate trade flows.
- Note: Results were featured in April 2022 WEO (Box 4.3).

### Social Protection and Poverty during the Pandemic
- Featured: analysis in April 2022 Fiscal Monitor (Box 1.1, Online Annexes 1.1, 1.2) under the FCDO-IMF partnership.
- Findings:
  - An estimated 70 million more people were in extreme poverty in 2021 relative to pre-pandemic trends, assuming no change in inequality.
  - If inequality had risen, poverty would have been even higher: a one percentage point increase in the Gini index translates into a poverty increase similar to the impact from a one percentage point decrease in per capita real GDP growth.
  - The analysis explores how policy and structural factors are associated with the projected post-pandemic rise in poverty, with a special focus on LIDCs.
  - The box analyzes the changing impact of fiscal support and social safety nets.
  - Poverty projections are classified by economic sector, health preparedness, size of the informal sector, and initial income inequality.

### Intergenerational Social Mobility in Africa
- Presentation: Analytical Corner by Rasmane Ouedraogo during the 2022 Spring meetings (April 2022).
- Scope: analysis of intergenerational social mobility in Africa since 1920.
- Note: A summary of the underlying paper was featured in the March 2022 newsletter.

### Model-based Framework on Climate Policies in Developing and Low-Income Countries
- Presentation: "A Macroeconomic Framework for Climate Adaptation and Mitigation Analysis" by Vu Chau and D. Filiz Ünsal at the IMF Climate Innovation Challenge 2022 (May 26th, 2022).
- Achievement: won first prize.
- Project: interdepartmental, jointly with the African Department and Institute for Capacity Development, to incorporate climate risks and adaptation analyses into the Fund’s macroeconomic framework.
- Model feature: incorporates novel aspects of climate risks and key characteristics of developing economies and low-income countries.

### Monetary Policy Frameworks and the IAPOC Index
- Working Paper presentation: “Monetary Policy Frameworks: An Index and New Evidence” by D. Filiz Ünsal presented at the Bank for International Settlements (March 11, 2022) and the Peterson Institute for International Economics (March 14, 2022).
- Output: IAPOC Index capturing the soundness of monetary policy frameworks.
- Coverage: IAPOC Index covers 50 countries across advanced economies, emerging markets, and low-income developing countries over 2007–2018.
- Internal toolkit launch: D. Filiz Ünsal and Chris Papageorgiou introduced the IAPOC toolkit to Fund staff on May 18, 2022, demonstrating how to use and download the IAPOC index and its pillars and sub-pillars with country case examples.

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_Source: https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/jun2022.pdf_