Volatility and growth: How can fiscal policy boost equitable growth in Argentina?

Volatility hurts growth, especially in low-income and emerging countries that are even more vulnerable to external shocks, which implies more risk and lower stability. The role of fiscal policies thus is not only to boost growth, but to cater for sustainable and equitable growth; especially for the poor who are the most vulnerable to market volatility.

“What can fiscal policy do to boost equitable growth in Argentina?”

Jimena Zúñiga, Marcelo Capello, Inés Butler and Néstor Grión from the IERAL of the Mediterranean Foundation attempt to provide an answer to this question in their research “A cycle-adjusted fiscal rule for sustainable and more equitable growth in Argentina”, which Jimena presented at the GDN 14th Annual Conference. In order to do this, they first define the main binding constraints to growth in Argentina, then they investigate which fiscal reform strategy is the most suitable to specifically tackle these constraints. They argue that for a reform strategy to be effective in Argentina, it must be inclusive; involving all levels of governmental sectors, and designed to stabilize key macroeconomic variables.

The proposed model is a cycle-adjusted fiscal rule, which is found to be effective in reducing Argentina’s macroeconomic volatility. In turn, this will result in long-term growth and an increase in welfare of the poor families. In the video below, Jimena Zúñiga explains the main pillars of this research and also briefly highlights the main findings and their potential impact on promoting sustainable and equitable growth in Argentina.

Jimena Zúñiga, IERAL of the Mediterranean Foundation

Read this Paper: A cycle-adjusted fiscal rule for sustainable and more equitable growth in Argentina

Urbanization and development: The enabling policy environment

Urbanization, development, and the enabling policy environment were the themes discussed in the fifth plenary session at GDN’s 13th Annual Conference, chaired by Santiago Levy (Inter-American Development Bank)

 

Mario Pezzini, Director of the OECD Development Center, offered an interesting perspective on a changing world geography, triggered by a variety of events. Pezzini posited that all countries are experiencing a new geography of growth, where the middle class is growing. A middle class from the South, or developing world, adamant on changing the status quo for the better.

He then moved on to a discussion of a number of cities, citing that each city offers a different context, making generalizations about urban phenomena hard at best. The unit of analysis in question then must depend on a variety of factors, based on the uniqueness of context.

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How much do we really know about the relationship between urbanization and poverty?

In the fourth plenary session of the 2012 GDN Annual Conference, focusing on urbanization and poverty, we took one step closer to seeing the inter-linkages between the two. It quickly became obvious that it is very hard to get a handle on urbanization without addressing poverty.

Plenary session 4 'Urbanization and poverty' - Photo credits http://www.vegeldaniel.com

Plenary session 4 ‘Urbanization and poverty’ – Photo credits http://www.vegeldaniel.com

Chaired by Gabor Kezdi, Professor and Head of Department of Economics, with the Central European University, the session discussed the interplay between these two notions, to better understand how to create maximum impact for the developing and undeveloped worlds.

Robert Buckley (New School of Research, USA) was the first speaker. He magnified themes related to urbanization and development and pondered whether cities were becoming Malthusian. Still optimistic about the market, Buckley argued that it is mainly a public policy issue, characterized by speculation.

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Urbanization: Making sense of its various externalities

On Day 2 of the GDN’s 13th Annual Conference, the third plenary session on “urban externalities, contagious disease, congestion, and crime,” discussed that very issue of the ramifications of urbanization, which is expressed very differently in various parts of the world.

George Mavrotas, Chief Economist with the Global Development Network and chair of the session, began by discussing the urban phenomenon, and its externalities, with an emphasis on what can go wrong, and how to ameliorate it. The speakers soon followed suit, starting with Teresa Caldeira, Professor of City and Regional Planning, at the University of California, Berkeley.

An anthropologist by training, Caldeira has conducted extensive research on changes in urban culture in Sao Paolo, Brazil, and how patterns of urban violence change frequently, producing new dynamics of violence, evident in the relationship between youth and city.

Leaving your mark on the city

A series of new urban practices in Sao Poalo began taking shape, protesting profound social inequality, where young frustrated males are the agents of that change, seeking visibility and expression in the city through what is referred to as imprinting, or graffiti, and through the rise of motor boys, largely lower-income courier boys, that crisscross the metropolis.

Also referred to as “Pixacao” in the local language, this new form of expression is seen as a mode of intervention by young men occupying and recreating the public space.

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