IMF Working Papers

Income Convergence or Divergence in the Aftermath of the COVID-19 Shock?

By Mariya Brussevich, Shihui Liu, Chris Papageorgiou

June 17, 2022

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Mariya Brussevich, Shihui Liu, and Chris Papageorgiou. Income Convergence or Divergence in the Aftermath of the COVID-19 Shock?, (USA: International Monetary Fund, 2022) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The paper extends the work of Deaton (2021) by exploring the period of post-crisis recovery in 2021-2024. The paper documents per-capita income divergence during the period of post-shock recovery, with countries at the bottom of the income distribution falling significantly behind. Findings suggest that higher COVID-19 vaccination rates and targeted virus containment measures are associated with faster recovery in per-capita incomes in the medium term. Evidence on the effectiveness of economic support policies for reducing cross-country income inequality, including fiscal and monetary policies, is mixed especially in the case of developing countries.

Subject: COVID-19, Health, Income, Income inequality, International trade, National accounts, Service exports

Keywords: Convergence, Convergence coefficient, COVID-19, Divergence, Global, Health impact, Income, Income convergence, Income inequality, Service exports, Support policies, Targeted virus containment measure, Vaccination rate

Publication Details

  • Pages:

    37

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2022/121

  • Stock No:

    WPIEA2022121

  • ISBN:

    9798400212727

  • ISSN:

    1018-5941

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