Asia’s Quest for Inclusive Growth Revisited

IMF Working Papers, February 26, 2015

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Asia’s Quest for Inclusive Growth Revisited

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Bibliographic details

• Authors: Chie Aoyagi, Giovanni Ganelli
• Published: February 26, 2015
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781498340144.001

Summary and context

• Despite rapid economic growth and poverty reduction, inequality in Asia worsened during the last two decades.
• The paper focuses on the determinants of growth inclusiveness and suggests options for reform.
• The analysis is based on a cross cross-country empirical analysis.

Key empirical findings

• Determinants identified as important for inclusive growth:
  • Fiscal redistribution.
  • Monetary policy aimed at macro stability.
  • Structural reforms to stimulate trade.
  • Structural reforms to reduce unemployment.
  • Structural reforms to increase productivity.
• The empirical results imply that strengthening these policies in Asia can better achieve growth with shared prosperity.

Scenario simulations and quantitative result

• Scenario simulations based on the empirical results suggest that expanding fiscal redistribution could have a sizeable effect in emerging Asia.
• Estimated improvement in the proxy of inclusive growth — a measure of growth in average income “corrected” for the equity impact — ranges from about 1 to about 8 percentage points.

Policy implications and recommendations

• There is still room to strengthen:
  • Fiscal redistribution mechanisms.
  • Monetary policy frameworks oriented toward macro stability.
  • Structural reforms that promote trade, reduce unemployment, and raise productivity.
• Strengthening these policies is recommended to better achieve growth with shared prosperity across Asia.

Metadata and classification (from source)

• Authors: Chie Aoyagi, Giovanni Ganelli
• Date: February 26, 2015
• Series: Working Paper No. 2015/042
• Pages: 29
• DOI: https://doi.org/10.5089/9781498340144.001
• Subjects/Keywords: Economic growth, Fiscal redistribution, Inclusive growth, Income distribution, Income inequality, National accounts, Poverty, Poverty reduction; absolute poverty, aggregate Gini Index, Asia, Asia and Pacific, East Asia, economic growth, fiscal policy, Fiscal redistribution, Gini coefficient, Inclusive growth, Income distribution, Income inequality, income share, indifference curve, inequality, level of significance, monetary policy, monetary policy variable, policy implication, poverty rate, Poverty-reducing effect, Sub-Saharan Africa, WP

Source: IMF Working Paper “Asia’s Quest for Inclusive Growth Revisited,” Chie Aoyagi and Giovanni Ganelli (2015).

Content in this bundle

• _wp1542 - Section V discusses effort and progress made towards inclusive growth in some Asian
  • _wp1542 - Section V discusses effort and progress made towards inclusive growth in some Asian (Markdown version)
  • _wp1542 - Section V discusses effort and progress made towards inclusive growth in some Asian (PDF)