Declining inequality in Bolivia: How and Why

Latin America has often been depicted as one of the most unequal regions in the world. However, after the rising of inequality, the figure decline dramatically starting from the year 2000. In this setting, Bolivia has been one of the poorest performers on income distribution efforts, lately, this situation has been improving. The author investigates the dynamics of this change through an analysis of household level surveys for 4 different years (2003/04, 2005, 2008 and 2009). The research applies a method of inequality decomposition– as developed by (Fields, 2003)-, this technique consists on regressing the expenditure of households against a vector of explanatory variables. The results suggest that education (more than other variables) has contributed on the reduction of inequality in Bolivia. Moreover, the sources of inequality are mainly attributed to the differences on human capital accumulation more than any other variables, such as the gender of the household head or the ethnical origin of the household. The results are in line with similar work made by other authors on the same issue (Gray-Molina, et al., 2001; Gray Molina &Yañez, 2009

The non-performing loan ‘tsunami’ that never happened (and how to stop it happening now)

Initial fears of rapidly worsening bank asset quality and an ensuing ‘NPL tsunami’ from the COVID pandemic have not materialised so far, thanks to the policy mix that governments have implemented. But to avoid a new wave of NPLs, additional policy action is needed in Europe – particularly as Omicron uncertainty perists, argue Reiner Martin (Joint Vienna Institute), Piroska Nagy-Mohacsi (LSE), Elina Ribakova and Jonathan M Fortun Vargas (Institute for International Finance)