## March 2022

## Source details

**Canonical URL:** [March 2022](https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2022.pdf)

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- [Markdown version](/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2022.pdf.md)
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### Capacity development and training events
- Gender Equality and Macroeconomics course (January 25th 2022)
  - IMF-FCDO experts joined IMF, ATI, and UN Women experts to deliver the first course on Gender Equality and Macroeconomics.
  - Participants: 45 participants, including 25 women, representing 21 countries (with 17 low-income), including 11 fragile states.
  - Course content: trends and recent developments along multiple dimensions of gender equality; the impact of gender equality on macroeconomic performance; policy options for tackling barriers to gender equality, with a focus on fiscal policy and gender-responsive budgeting.
  - Application: IMF-FCDO experts presented a model to assess gender public policies, with an application to Senegal.
  - Evaluation: the course was well received (average rating 4.7 / 5) and led to significant learning demonstrated by end-of-course group presentations.
- Online Monetary Policy Analysis and Forecasting (MPAFx)
  - With support from the Government of Japan and FCDO, an additional module on model-based forecasting was developed and included in the February 2022 MPAFx offering.

### Research findings on inflation, fuel prices, and distribution
- "The Distributional Implications of the Impact of Fuel Price Increases on Inflation" (Energy Economics) — Kangni Kpodar and Boya Liu
  - Data: uses the updated Global Monthly Retail Fuel Price Database.
  - Key findings:
    - The response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies.
    - Past studies using crude oil prices instead of retail fuel prices to estimate passthrough to inflation significantly underestimate it.
    - While the purchasing power of all households declines as fuel prices increase, the CPI of the 20 percent richest households rises more than that of the 20 percent poorest households.
    - The progressivity (richer households’ CPI rising more) phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

### Assessments of IMF capacity development and monetary policy frameworks
- Taking stock of FPAS capacity development (departmental paper by ICD and MCM)
  - Focus: Forecasting and Policy Analysis System Capacity Development (FPAS CD) experience in African and Asian central banks.
  - Purpose: share insights and typical tools developed to facilitate understanding of FPAS CD within the IMF and inform future capacity development on building macroeconomic frameworks.
  - Approach: qualitative assessment of FPAS CD delivery and use of FPAS in central bank decision-making.
- "Monetary Policy Frameworks: An Index and New Evidence" (Working Paper) — D. Filiz Ünsal, Chris Papageorgiou, and Hendre Garbers
  - Contribution: constructs the IAPOC index characterizing monetary policy frameworks across three pillars: Independence and Accountability, Policy and Operational Strategy, and Communications.
  - Scope: analyzes central banks’ laws and websites for 50 advanced economies, emerging markets, and low-income developing countries, from 2007 to 2018.
  - Finding: the index provides a holistic view beyond existing measures; monetary policymaking is varied, fast-changing, and eclectic across the Policy and Operational Strategy and Communications pillars, especially in emerging markets and low-income developing countries.

### Macroeconomic analyses of Covid-19 impacts and recovery in low-income countries
- "Loss-of-Learning and the Post-Covid Recovery in Low-Income Countries" (Working Paper) — Edward Buffie; Christopher Adam; Luis-Felipe Zanna; Kangni Kpodar
  - Method: dynamic general equilibrium model calibrated to structural characteristics of vulnerable low-income countries to replicate key dimensions of the Covid-19 shock.
  - Main result: absent significant and sustained external financing, persistence of loss-of-learning effects on labor productivity is likely to make the post-Covid recovery more attenuated and more expensive than many contemporary analyses suggest.

### Studies on social mobility, fragility, and food insecurity
- Intergenerational social mobility in Africa — Rasmane Ouedraogo and Nicolas Syrichas
  - Data: large harmonized dataset of more than 72 million individuals covering since 1920.
  - Findings:
    - Substantial geographical variations in upward/downward educational and occupational mobility across and within African countries, and by gender and rural/urban divide.
    - Observable individual characteristics (gender, marital status, age, etc.) partly explain social mobility.
    - Educational mobility is a driver of occupational mobility.
    - Strong predictors of social mobility include the quality of institutions, level of public spending on education, social protection coverage, natural resource endowments, and countries' fragility.
- Fragile and conflict-affected states (FCS)
  - Analysis under the FCDO-IMF research collaboration (featured January 21, 2022) shows per capita incomes in FCS will not recover to near their 2019 levels until 2024 based on IMF projections; by then, the gap with pre-pandemic per capita income trends is set to remain larger for FCS than for other countries.
  - Low-income FCS are particularly at risk to be left behind.
  - Outputs and ongoing workstreams under the FCDO-IMF research collaboration are featured as existing and forthcoming analytics in the IMF’s comprehensive strategy to strengthen support to FCS discussed at the IMF Board Meeting on March 9 with a launching event on March 18.
- Food insecurity in Low-Income Countries — John Spray, Diogo Baptista, and D. Filiz Unsal
  - Method: open economy spatial macro model calibrated for a typical low-income country in Sub-Saharan Africa to simulate climate change shocks.
  - Policy insights: government fiscal support, better transport infrastructure, and climate-smart investments can help build resilience to shocks.

### Country and microeconomic studies
- The Socio-Economic Impact of Special Economic Zones: Evidence from Cambodia — Mariya Brussevich
  - Data and identification: database on existing and future SEZs in Cambodia matched to household surveys at the district level; alternative control group including future SEZ program participants and districts adjacent to SEZ hosts; propensity score weighting technique.
  - Findings:
    - Entry of SEZs disproportionately benefits female workers and leads to a decline of income inequality at the district level.
    - Land values in SEZ districts tend to rise while wage levels remain largely unchanged relative to other districts.
    - Tests conducted for socio-economic spillovers to surrounding areas and for agglomeration effects associated with clusters of multiple SEZs.
- Search Externalities and Firm-to-Firm Trade — John Spray
  - Data: firm-to-firm transaction level data from Uganda and a structural model.
  - Findings: strong support for government interventions to support firms in resolving search frictions in identifying buyers both domestically and abroad; quantifies welfare gains from opening to trade.

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_Source: https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2022.pdf_