## March 2018

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**Canonical URL:** [March 2018](https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2018.pdf)

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### Peer learning workshops and technical assistance
- Senegal Workshop on Diversification (Dakar, January 22-25, 2018):
  - Shared diversification experiences with UNECA and the Africa Centre for Economic Transformation.
  - Common positive outcomes: focus on supporting and creating firms that result in a dynamic export sector and adopting policies to lift binding constraints (regulatory, infrastructure, logistics, or skills).
  - Many countries found it easier to create a separate system, often in special zones, where more liberal trading arrangements and better infrastructure could be offered.
  - IMF team provided a day-long training to the Ministry of Finance technical staff on the DIG model and presented modelling methodologies.
- Modernizing Monetary Policy in Sub-Saharan Africa:
  - IMF-DFID collaboration with selected central banks and IMF country teams to modernize monetary policy practice and analysis.
  - IMF expert participated in the East African Community’s (EAC) Technical Working Group on Forecasting and Policy Analysis System (FPAS WG) annual meeting (Nairobi, Kenya, December 2017). The EAC FPAS WG is described as a platform for knowledge-sharing and harmonization of FPAS development among EAC Partner States’ central banks.
  - IMF organized a joint IMF/Bank of Uganda (BoU) annual modelling and forecasting workshop (January 2018). The IMF team assisted the BoU modelling team to further develop their quarterly projection model to capture the authorities' view of the monetary transmission mechanism and shocks, in line with best practices in emerging economies.
- Peer Learning Workshop on Gender Budgeting (Africa Training Institute):
  - Convened by the IMF and UN Women to share best-practices in gender budgeting with technical-level staff from ministries of finance and sectoral ministries.
  - Participants included staff from Malawi, Mauritius, Mozambique, Tanzania, and Uganda.
  - Panel discussions focused on linkages between planning and budgeting, gender disaggregated data collection and analysis, tracking allocations, sectoral plans, and engaging with parliament and civil society.

### Conferences and presentations
- 2018 ASSA Annual Meeting:
  - Jonathan Ostry presented on "Making Globalization More Inclusive".
  - Other session speakers: Joseph Stiglitz (Columbia University), Jeffrey Frieden (Harvard University), and Dani Rodrik (Harvard University).
  - IMF team presentations included:
    - "The Agricultural Wage Gap: Evidence From Brazilian Micro-data" (session on Sectoral Wage Gaps and the Returns to Migration).
    - "Financial Development and Monetary Policy: Loan Applications, Rates, and Real Effects" (session on Channels of Monetary Transmission).
- 2018 CSAE Conference (Oxford):
  - IMF-DFID research project presentations on globalization and inclusive growth, government spending shocks, access to finance, and poverty and inequality.
  - Opening plenary panel to discuss recent research on inequality and inclusive growth, gender, and structural transformation.
- Conference on Financial Inclusion (IMF Headquarters, Washington, DC, March 22, 2018):
  - One-day conference titled “Financial Inclusion: Drivers and Real Effects”.
  - Program structured in three sessions: access to and use of bank accounts; access to and use of credit; access to and use of payment services.
  - Conference includes nine papers with discussants and open floor discussions after each paper; closes with a panel on policies to promote financial inclusion while safeguarding financial stability.

### Research findings and empirical studies
- Structural Transformation and the Agricultural Wage Gap:
  - Study using Brazilian household surveys and administrative panel data on workers who switch sectors to decompose drivers of the agricultural wage gap.
  - Main finding: most of the wage gap is explained by differences in worker composition.
  - Evidence speaks against large short-term gains from reallocating workers out of agriculture and favors recently proposed Roy models of inter-sector sorting.
  - A calibrated sorting model of structural transformation can account for the wage gap level observed and its decline as the economy transitioned out of agriculture.
- The Distributional Effects of Capital Account Liberalization:
  - Panel data estimates for 149 countries from 1970 to 2010 indicate episodes of capital account liberalization increase the Gini measure of inequality.
  - Episodes are associated with a persistent increase in the share of income going to the top.
  - Three investigated channels:
    - The impact on inequality is stronger where credit markets lack depth and financial inclusion is low; positive impacts of liberalization on poverty rates vanish when financial inclusion is low.
    - The impact on inequality is stronger when liberalization is followed by a financial crisis.
    - Liberalization appears to alter the relative bargaining power of firms and workers: the labor share of income falls in the aftermath of capital account liberalization.

### Country case study and model applications
- Solomon Islands – DIG model with disaster vulnerability:
  - Solomon Islands faces wide infrastructure gaps relative to other small developing states and high frequency of natural disasters.
  - The Debt-Investment-Growth (DIG) model was applied to illustrate outcomes of different public investment profiles, financing strategies, institutional capacity, and public investment management approaches.
  - Model extended to incorporate vulnerability to natural disasters.
  - Key findings:
    - Climate- and natural disaster-resilient infrastructure brings benefits to fiscal indicators, investment, and growth.
    - Public financial management (PFM) reforms that strengthen public investment management are beneficial.
    - Tapping external concessional financing facilitates recovery from natural disasters and minimizes risks of unsustainable debt build-up.

### FDI, global value chains, and policy implications
- FDI and Global Value Chains in sub-Saharan Africa:
  - A new wave of FDI has made inflows more diversified geographically and sectorally.
  - Analysis shows a high degree of complementarity between involvement in global value chains and FDI.
  - Policy implications: support entry and upgrading in global value chains—especially through a strong institutional setting and a well-educated labor force—to maximize spillovers from foreign investment.
- World Government Summit session on Gender Budgeting:
  - 2018 World Government Summit plenary session on innovative gender budgeting, co-organized with the UAE Gender Balance Council, emphasized evaluating how fiscal policies affect gender equity goals.
  - Opening remarks by the IMF Managing Director and OECD Secretary General; panelists included representatives from the IMF, UN Women, UAE Ministry of Finance, and the OECD; moderated by Hadley Gamble (CNBC).

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_Source: https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2018.pdf_