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Asia and Pacific > India

You are looking at 1 - 10 of 60 items for :

  • Type: Journal Issue x
  • Consumption; Economics x
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Cover IMF Working Papers
Unveiling the Informal Economy: An Augmented Factor Model Approach
Jiaxiong Yao
This paper develops a new approach to estimating the degree of informality in an economy. It combines direct yet infrequent measures of the informal economy in micro data with an augmented factor model that links macro indicators of the informal economy to its causes. We show that the prevailing model used in the literature, the multiple indicators multiple causes model, is a special case of the augmented factor model and depicts an incomplete picture of the informal economy. Using the augmented factor model approach, we show that the dynamics of the informal economy is shaped by the strength of overall economic activity as well as the interplay between the formal and informal economies. Contrary to previous work that typically finds declining informality for most countries, we find that the degree of informality has increased for low-income countries for the past two decades.
Keywords:
Informality; augmented factor model; MIMIC model; survey data; indicators of the informal economy; WBES data; D. adding nighttime; nighttime Light; component analysis; Informal economy; Factor models; Monetary base; Electricity; Consumption; Global
Cover IMF Working Papers
Mitigating Climate Change at the Firm Level: Mind the Laggards
Damien Capelle
,
Divya Kirti
,
Nicola Pierri
, and
German Villegas Bauer
Using self-reported data on emissions for a global sample of 4,000 large, listed firms, we document large heterogeneity in environmental performance within the same industry and country. Laggards—firms with high emissions relative to the scale of their operations—are larger, operate older physical capital stocks, are less knowledge intensive and productive, and adopt worse management practices. To rationalize these findings, we build a novel general equilibrium heterogeneous-firm model in which firms choose capital vintages and R&D expenditure and hence emissions. The model matches the full empirical distribution of firm-level heterogeneity among other moments. Our counter-factual analysis shows that this heterogeneity matters for assessing the macroeconomic costs of mitigation policies, the channels through which policies act, and their distributional effects. We also quantify the gains from technology transfers to EMDEs.
Keywords:
Climate Change; Productivity; Technology Adoption; Capital Vintages; Emissions; R&D expenditure; capital vintage; management practice; emission intensity; emission Intensity; Carbon tax; Greenhouse gas emissions; Consumption; Stocks; Global
Cover IMF Working Papers
Inequality and Poverty in India: Impact of COVID-19 Pandemic and Policy Response
Ms. Elif C Arbatli Saxegaard
,
Mattia Coppo
,
Nasser Khalil
,
Shinya Kotera
, and
Ms. Filiz D Unsal
Using microdata from nationally representative household and labor force surveys, we study the impact and drivers of poverty and inequality in India during the pandemic. We have three main findings. First, India has made significant progress in reducing poverty in recent decades, but the economic downturn associated with the COVID-19 pandemic is estimated to have temporarily increased poverty and inequality. Second, education and employment status seem to be the main factors associated with poverty and income/consumption changes. Finally, the government’s expansion of food subsidies has likely played a significant role in mitigating the increase in poverty during the pandemic.
Keywords:
COVID-19; poverty; inequality; earnings; India; employment status; CPHS datum; poverty in India; consumption inequality; inequality in India; Annex II; Income; Income inequality; Consumption; Global; South Asia
Cover IMF Working Papers
The Distributional Impact of a Carbon Tax in Asia and the Pacific
Cristian Alonso
and
Mr. Joey Kilpatrick
While a carbon tax is widely acknowledged as an efficient policy to mitigate climate change, adoption has lagged. Part of the challenge resides in the distributional implications of a carbon tax and a belief that it tends to be regressive. Even when not regressive, poor households could be hurt by a carbon tax, particularly in countries that rely heavily on carbon-intensive energy sources. Using household surveys, we study how a carbon tax may affect households in the Asia Pacific region, the main source of CO2 emissions. We document a wide range of country-specific policies that could be implemented to compensate households, reduce inequality, and build support for adoption.
Keywords:
Carbon pricing; Climate change; Compensation; Distributional effects; Inequality; means testing; Labor income; fiscal revenue; price of energy goods; carbon tax revenue; special administrative region; carbon pricing assessment tool; Carbon tax; Income; Household consumption; Consumption; Income inequality; Asia and Pacific; Global
Cover IMF Working Papers
Falling Use of Cash and Demand for Retail Central Bank Digital Currency
Mr. Tanai Khiaonarong
and
David Humphrey
Cash use in most countries is falling slowly. On the margin, younger adults favor cash substitutes over cash. For older adults it is the reverse. Revealed preference tied to a changing population age structure seems to be the main influence on the demand for cash and why it is falling. Cash use may continue to fall, and card use (the main cash substitute) may fall by more, if CBDC is issued. The extent of this reduction depends on the demand for retail CBDC and the incentives (primarily transaction fees) that can play a determining role in CBDC adoption and use.
Keywords:
Cash; card payments; payment substitution; central bank digital currency; cash share; cash use; cash substitute; use of cash; card substitution; Currencies; Central Bank digital currencies; Digital currencies; Household consumption; Payment systems; Africa
Cover IMF Working Papers
Distribution Costs
Alessandra Peter
We provide the first direct estimates of distribution expenses incurred by manufacturing plants and assess their importance for aggregate output. Using a novel measure from the Indian Annual Survey of Industries, we document three key facts: (1) distribution expenses are large – they amount to over half of labor costs; (2) plants in the largest decile – relative to the smallest – spend over three times as much on distribution as a share of sales; and (3) between 2000 and 2010, distribution costs as a share of sales declined by one third. We develop a model of heterogeneous manufacturing firms that rely on the distribution sector to sell their goods across space. We quantify the model using the facts on size and systematic heterogeneity in distribution shares as well as newly constructed estimates of intranational trade. Accounting for firm heterogeneity in distribution requirements is important: welfare losses from low TFP in the distribution sector are amplified 1.5-fold. From 2000 to 2010, India saw an increase in intranational trade hand in hand with a decrease in the distribution share. In combination with the model, these trends suggest largescale decreases in both variable and fixed costs of distribution, leading to welfare gains of 58% over this ten year period.
Keywords:
Distribution; transportation costs; aggregate productivity; welfare loss; distribution sector; distribution share; share of sales; distribution expense; Manufacturing; Productivity; Total factor productivity; Consumption; Labor costs
Cover IMF Research Bulletin
IMF Research Perspectives: Spring-Summer 2019
The Spring-Summer 2019 issue of the IMF Research Perspectives explores how technology deals with old questions. Articles discuss the ways technological progress and the increased availability of data have helped in some areas, while presenting new challenges for analyzing various matters. The issue also includes an interview with Gita Gopinath, the new director of the IMF Research Department.
Keywords:
IRB; economy; heightened economic risk; investor; energy consumption; asset price; work agenda; investor sentiment; dream job; modeling work; Global; Sub-Saharan Africa; Africa; Consumption; Asset prices; Personal income; Robotics; Income; IMF research perspective; measuring sentiment; director of the research DepartmentTechnological change; future of work; impact of Africa
Cover IMF Working Papers
Inequality in Good and Bad Times: A Cross-Country Approach
Ms. Burcu Hacibedel
,
Pierre Mandon
,
Ms. Priscilla S Muthoora
, and
Nathalie Pouokam
This paper provides evidence of a strong relationship between the short-term dynamics of growth and inequality in developing economies. We find that reductions in inequality during growth upswings are largely reversed during growth slowdowns. Using a new methodology (mediation analysis), we identify unemployment, and youth unemployment especially, as the main channel through which fluctuations in growth affect future dynamics in inequality. These findings suggest that both the quality of jobs created and labor market policies are important to ensure that growth outcomes are conducive to inequality reduction.
Keywords:
WP; youth unemployment; unemployment channel; dependent variable; mediation analysis; Inequality; Growth; Developing countries; Growth conditions; growth rate; confidence interval; explanatory variable; structural equation; Income inequality; Income distribution; Unemployment; Personal income; Consumption; East Asia; Europe; Caribbean; Global; Middle East
Cover IMF Working Papers
Universal Basic Income in Developing Countries: Issues, Options, and Illustration for India
Mr. David Coady
and
Delphine Prady
This paper discusses two common arguments for the adoption of a UBI; that it can be a more effective way of supporting low-income households when existing safety net programs are inefficient, and that it can generate broad support for structural reforms. Using India as an illustration, the paper discusses the trade-offs that need to be recognized in adopting a UBI in these contexts. It shows that replacing the 2011 Public Distribution System (PDS) with a UBI results in losses for many low-income households, although much of this can be reduced by recycling the “out-of-system” PDS losses and the fiscal savings from excluding the highest-income groups as higher UBI transfers. In contrast, replacing inefficient energy subsidies—raising energy prices to efficient levels to internalize the negative environmental externalities of energy consumption—could simultaneously deliver unambiguous distributional gains, help address fiscal pressures, and improve energy efficiency with associated environmental and health gains. Implementing such reforms would, of course, require careful communication and implementation to address political barriers to reform.
Keywords:
WP; price; subsidy; income; government; universal basic income; safety net reform; efficient energy pricing; distributional gains; energy subsidy; subsidy program; government price intervention; PDS subsidy; income decile; Personal income; Energy subsidies; Total expenditures; Energy prices; Consumption; Global
Cover IMF Research Bulletin
IMF Research Bulletin, March 2017
International Monetary Fund. Research Dept.
This issue of the IMF Research Bulletin features recommended readings from IMF Publications and an update on recent IMF Working Papers and IMF Staff Discussion Notes. It also includes a special announcement welcoming Linda Tesar (University of Michigan) as the new editor of “IMF Economic Review.” The Q&A section explores “Seven Questions on China-Africa Relations” (Luiz Almeida, Wenjie Chen, and Oral Williams). The Research Summaries surveys “Income Polarization in the United States” (Ali Alichi, Kory Kantenga, and Juan Sole); and “The Future Wealth of Nations: World Trade in Services” (Prakash Loungani, Saurabh Mishra, Chris Papageorgiou, and Ke Wang).
Keywords:
IRB; IMF research bulletin; income; SSA commodity exporter; href; shrinking workforce; journal of the IMF; macro-structural policy; IMF research; labor market distortion; Personal income; Service exports; Income distribution; Income inequality; Exports; Global; Sub-Saharan Africa; Europe; Central America