Institutional diversity in the euro area: Any evidence of convergence?

In recent years differences in the institutional structure across euro area countries are becoming a cause of concern both for some individual Member States and for the functioning of the Economic and Monetary Union (EMU). From a global competitiveness perspective, we deal with the diversity in the institutional environment in the EMU. In particular, we assess whether the changes in the state of institutions provide convergence across euro area countries between 2006 and 2015. In addition, among the institutional indicators considered, we compute which institutional aspect contributes more to overall inequality in the state of institutions, as well as the contribution of each country to inequality considering as benchmark the country with the highest institutional quality. According to these country contributions, we highlight distinct patterns of convergence between ‘core’ and ‘periphery’ euro area countries and raise potential links between the institutional changes across euro area countries and both the differences in the intensity of the financial and economic crisis, and the policy responses in terms of fiscal consolidation applied by the respective national governments.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Who takes the cake Effects of ECB monetary policy across income classes

This work provides evidence on the effects of monetary policy on the income class structure via stimulating economic activity and employment in Eurozone countries over the period 2007Q32016Q1. Based on European Union Statistics on Income and Living Conditions (EU-SILC) data, we compute the share of the market income perceived by each income class (lower, lower-middle, upper-middle, and upper) for the states that originated the Economic and Monetary Union (EMU11). We analyse the impact of monetary policy impulses under a Bayesian Vector Autoregressive approach and find that a monetary easing shock involving a decrease in nominal interest rates tends to increase the income share of middle classes at the expense of a smaller income share of the upper class, while, the lower class is not significantly affected. Our findings highlight the identified effects are mostly triggered by short-term interest rates cuts as long as they tend to vanish as the monetary policy proxy is located further in the yield curve. This suggests that the egalitarian impacts of monetary policy on market income distribution are to a lesser extent driven by decisions modifying longer-term interest rates.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Multidimensional poverty in the EU: rethinking AROPE through a multi-criteria analysis

At risk of poverty or social exclusion rate (AROPE) constitutes the pivotal indicator of living conditions and poverty in the European Union. Nevertheless, as a multidimensional poverty measure, it has some drawbacks that significantly reduce its utility. In this paper, we propose an alternative multi-criteria approach that provides some innovations for the computation of multidimensional poverty in the European countries. We first propose a normalization formula for each dimension by using a double point of reference. We then put forward alternative aggregation functions that permit diverse degrees of substitutability across dimensions. This new formulation allows us to go beyond focusing merely on the rate of people classified as AROPE, making it possible to evaluate aspects such as the intensity of multidimensional poverty and how changes over time are distributed across population in terms of shared prosperity, as showed in an illustration for the EU28 countries.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tec

Monetary policy and middle class

The global financial crisis of 2007-2008 and the subsequent period of financial and economic instability have forced central banks to implement ultra-loose monetary policies for combating the downturn and the stagnation of inflation, which has led the question about how monetary policy might affect inequality to the foreground of economic and political debates. This paper attepts to evaluate how monetary policy implemented in the Euro area (EURO-11) has affected two aspects of income distribution, namely, the size of middle class dimension and its mobility. To this end, an econometric model is estimated based on data from 2003 to 2015 for the set of countries belonging to the Economic and Monetary Union that originated the Union (EMU1999). We apply the vector autoregressive (VAR) methodology to country-level panel data as a first approach of the short-term dynamics among the considered variables, where the impulse-response functions have been orthogonalized due to the existing serial correlation between the unobserved terms. Subsequently, this analysis is complimented with a more robust one. Since our variables are non-stationary but indeed co-integrated, the vector error correction model (VECM) allows us to consider the medium-term relationship between monetary policy and income inequality via the stimulus of the economic activity.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

How does monetary policy affect the income class structure? Evidence from the Eurozone.

This work provides evidence on the potential effects of monetary policy on the income class structure via stimulating economic activity and employment in the Eurozone countries over the period 2007Q3-2016Q1. Based on European Union Statistics on Income and Living Conditions (EU-SILC) data, we compute the size of income classes (lower, lower-middle, upper-middle, and upper) for the stats that originated the Economic and Monetary Union (EMU-11) and analyse the impact of monetary policy impulses under a Bayesian Vector Autoregressive approach. We focus on the earnings heterogeneity and the income composition channel and find that a monetary easing shock involving a decrease short-term nominal interest rate has diverse effects on the different income classes, which seems to have led to a more equal income distribution. As theoretically argued by these monetary policy transmission mechanisms, our results confirm the GDP growth and the decrease in unemployment caused by the monetary policies implemented by the European Central Bank since the onset of the financial crisis have had a positive effect for those households located at the bottom of the income-class structure as well as for the middle class.Campus de Excelencia Internacional Andalucía Tec

Economic Fluctuations, Child Mortality and Policy Considerations in the Least Developed Countries

Between 1990 and 2010 child mortality decreased in general terms in the Least Developed Countries (LDCs), although the differences between countries over time are significant. This paper examines the relationship between short-term economic fluctuations and changes in child mortality in the LDCs during the period 1990-2010. Unlike other studies, we consider a large group of LDCs and provide empirical evidence of the asymmetrical effects of variations in Gross Domestic Product per capita on the evolution of child mortality rate in periods of economic recession and expansion. The significance of said effects diminishes when other relevant socio-economic control variables are considered, and some development policy considerations are addressed in order to achieve the Millennium Development Goal 4 target

Stagnant growth and income class structure in European countries

In recent years, there has been increasing debate about the low economic growth and the risk of secular stagnation in economically advanced countries. Some authors point out possible links between secular stagnation and income inequality, causally in both directions. Taking as a reference point the theoretical literature on the relationship between economic growth and income distribution, this study examines the extent to which different levels of economic growth are associated with the income class structure in European countries between 1993 and 2016, focusing on income distribution before taxes and transfers (market incomes). We highlight that in recession periods the size and income share of the middle class decrease, while the opposite occurs in periods with strong economic growth rates. Nevertheless, when growth rates are modest the patterns are much less clearly defined. Some policy and institutional implications are discussed in order to tackle the concerns of secular stagnation and inequality simultaneously.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

The distribution of the left behind individuals in EU countries: Central and Eastern countries vs Western countries

This paper examines the differences in the extent individuals are left behind across the EU between Central and Eastern European (CEE) –former countries with non-democratic regimes and centrally planned economies – and Western European (WE) countries. We adopt the perspective of the principle of ‘Leaving no one behind’ of the 2030 Sustainable Development Agenda, and consider a multidimensional setting, addressing three dimensions, namely income, material deprivation and work intensity . We compare both blocs of countries over the period 2007-2019 and observe a certain process of convergence between blocs as a result essentially of the decrease in the LB level in the CEE countries over the period analysed, reaching levels similar to those of the WE countries.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Impacto del ciclo económico sobre la evolución de la supervivencia infantil en el mundo en desarrollo. Determinantes de la pobreza infantil en Europa

El presente trabajo se corresponde con dos investigaciones relacionadas con la infancia en situación de riesgo y vulnerabilidad. A) Examinamos la correspondencia entre las fluctuaciones económicas cíclicas y la evolución de la mortalidad infantil en los Países Menos Adelantados (PMA) durante el periodo 1990-2010, poniendo de manifiesto efectos asimétricos de las fluctuaciones económicas sobre la evolución de la mortalidad infantil en periodos de recesión y expansión económica. B) Valoramos en qué medida las diferencias en la tasa de pobreza infantil entre los países europeos pueden explicarse simultáneamente por características de los hogares (perspectiva micro) y por factores específicos de cada país (perspectiva macro), tales como prestaciones económicas en el ámbito de la protección a la infancia o situación socio-laboral general.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech