Macroeconomic Fluctuations, Inequality, and Human Development

This paper examines the two-way relationship between inequality and economic fluctuations, and the implications for human development. For years, the dominant paradigm in macroeconomics, which assumed that income distribution did not matter, at least for macroeconomic behavior, ignored inequality--both its role in causing crises and the effect of fluctuations in general, and crises in particular, on inequality. But the most recent financial crisis has shown the errors in this thinking, and these views are finally beginning to be questioned. Economists who had looked at the average equity of a homeowner--ignoring the distribution--felt comfortable that the economy could easily withstand a large fall in housing prices. When such a fall occurred, however, it had disastrous effects, because a large fraction of homeowners owed more on their homes than the value of the home, leading to waves of foreclosure and economic stress. Policy-makers and economists alike have begun to take note: inequality can contribute to volatility and the creation of crises, and volatility can contribute to inequality. Here, we explore the variety of channels through which inequality affects fluctuations and fluctuations affect inequality, and explore how some of the changes in our economy may have contributed to increased inequality and volatility both directly and indirectly. After describing the two-way relationship, the paper discusses hysteresis--the fact that the consequences of an economic downturn can be long-lived. Then, it examines how policy can either mitigate or exacerbate the inequality consequences of economic downturns, and shows how well-intentioned policies can sometimes be counterproductive. Finally, it links these issues to human development, especially in developing countries

Impact of financial crises on poverty in the developing world: an empirical approach

This article adopts a cross-country perspective to analyse the short term effects of currency, banking and debt crises on the poverty headcount ratio and the poverty gap (as measured by the World Bank), employing multivariate fixed-effects panel data analysis. The findings suggest that currency crises most significantly exacerbate both the incidence and depth of poverty in the short run. Banking crises are associated with an increase in the depth of poverty but not the incidence while there is no direct effect of sovereign debt crises. Given the low level of significance, the results are far from conclusive and offer only partial indications of the crises-poverty nexus

How climate change interacts with inequity to affect nutrition

Climate change poses a growing threat to the achievement of optimal nutritional status, both directly through affecting food production and indirectly through altering social and economic influences in people's lives. These adverse nutrition outcomes are not evenly distributed across the world, and vulnerable populations are the most impacted. Understanding how different forms of inequity interact with climate change and adverse nutritional outcomes is a novel area of research in today's challenging environment of increased climate change pressures. This article presents the results of a systematic literature search undertaken to identify the connections, trends and pathways between climate change, inequity and nutrition outcomes. Forty‐six peer‐reviewed studies are identified that explore these complex interactions with a specific focus on the extent to which equity is a fundamental component of climate change and nutrition research. The pathways captured in this body of evidence are mapped to current framework thinking to identify trends and gaps. While there is a trend for studies to acknowledge an unfair distribution of vulnerability to adverse nutrition outcomes, there is less attention given to the (lack of) recognition of the social situations which increase these groups' vulnerability and the absence of representation or inclusion of these groups as vital decision‐makers. Studies that do incorporate these core dimensions of equity take mixed‐method and qualitative approaches. This highlights an inherent value in stepping outside the usual scope of empirical climate change research, one that incorporates the voices of those most affected

Visions of change as visions of continuity

Despite wide consensus that leader vision is a key vehicle for leaders to motivate followers to support organizational change, it remains far from clear what characterizes an effective vision of change. Research on organizational change that has used a social identity perspective has asserted that one important reason why followers resist change is because change may pose a threat to their subjective sense of continuity of organizational identity. Accordingly, we hypothesize that leaders that communicate visions of change can address this resistance by assuring followers that the essence of the organizational identity will remain unchanged—making their vision of change also a vision of continuity. In line with our proposition that collective continuity is valued because it serves an uncertainty-reduction function, such visions should be more predictive of vision effectiveness the higher follower work-related uncertainty. Across a field study and an experimental study we find support for these predictions