Macroeconomic variables and income distribution: Conditional modelling with the generalised exponential

This paper presents a method of examining the effects of macroeconomic variables on the personal distribution of income over time. The approach involves modelling the complete distribution of income in each year using a flexible functional form from the generalised exponential family of distributions. The parameters of the distribution are specified as functions of the macroeconomic variables. It is shown how comparative static analyses, involving the modes and Atkinson inequality measures, can be performed. The method is applied to male New Zealand income distribution data for the period 1985–1994. The rate of unemployment is found to be the primary influence on the form of the distribution. Higher unemployment is found to decrease the modal income and increase the Atkinson inequality measure.     

Economic growth and equity: Complements or opposites?

There is no automatic mechanism in a market economy to guarantee reduced inequality of income with growth. Some theories lead us to expect just the opposite. At best, there are self-limiting cyclical effects, associated with changes in unemployment. U.S. economic growth has actually been quite slow since the 1950s. Besides, there are structural barriers to reduced inequality that operate with or without growth. Historical evidence for different countries presents a mixed picture. For the U.S. economy, postwar growth has been associated with an upturn in measured inequality. Government intervention has been mildly equalizing, through transfers and expenditures but not through taxes.     

Income distribution,macroeconomic analysis and barriers to full employment

This paper seeks to reassert the significance of income distribution for macroeconomic analysis. It argues that the non accelerating inflation rate of unemployment, which has been central to mainstream macroeconomic analysis, should be viewed as a distributional constraint on the achievement of full employment with the implication that mechanisms to resolve distributional conflict without resort to the weapon of unemployment are required if full employment is to be secured. The significance of income distribution for aggregate demand is then been examined, and it is argued that higher profit shares in the past 15 years have harmed the prospects for high levels of economic activity and employment, and that rising profitability does not appear to have stimulated investment. It is then finally argued that monetary policy should not be seen as a technical matter but rather as a policy with significant distributional impacts.     

Unemployment, Poverty and Income Disparity in Urban China

This paper studies the issues of unemployment and poverty that have been appearing recently in urban China. It estimates the urban unemployment rate, poverty rate and income disparity using a new sample survey data set. Meanwhile, it analyzes the relationship between unemployment and poverty, and the effects of poverty on urban inequality. The main findings are that: (i) the urban unemployment rate reached 11.6% in 1999 and was a major cause of urban poverty; (ii) growing urban poverty is becoming the significant source of worsening urban inequality; and (iii) migrant households have an increasing influence on urban poverty and the pattern of urban income distribution. The paper concludes that urban income distribution has worsened since 1995, and urban unemployment and poverty are the major factors in this worsening.     

我国收入分配问题研究述评

改革开放以来我国的收入差距持续扩大，收入分配问题吸引了众多学者的关注，也引发了诸多争论。本文回顾了在收入分配制度研究、“倒U”理论、收入差距测度、城乡差距和地区差距研究等几个方面产生的理论争论，并做出了简单评述。     

How Pervasive is the World Business Cycle?

The paper tries to establish whether business-cycle synchronization across countries is due to a single world business cycle, to a diversity of regional business cycles or a combination of both. The methodology used does not impose any prior hypothesis about the existence of a business cycle with a specific regional composition. If regional business cycles exist, the regional composition would be estimated from the data used and the countries will form a region. The results indicate that there are four common components, but none specific to a geographical or cultural region. The only division found is between high and middle income countries. However inside these groups we can find some sets of countries that have a high degree of commovement. We will call these last groups clusters.     

Demographic change and income inequality in the United States, 1976-1989

"The U.S. economy experienced significant increases in the degree of income inequality over the past two decades.... In this paper we consider the effects of race, age, female headship, and college education on the distribution of family income by developing a multivariate methodology that allows us to gauge the influence of one factor while holding other determinants of family incomes constant. Over the period studied we find that race had only a minor effect on the overall size distribution of income. Age had a somewhat greater effect than race. In contrast, the impact of female heads and college education were quite substantial. The multivariate estimates reveal that the effects of female heads and college education both increase the Gini to a much greater extent than the progressivity of federal income taxes decreases it. The effects of college education and female headed families on inequality have grown larger across time, while the influence of age has declined. We find that the effects of race on inequality have changed little over the 1976 to 1989 period."     

Pollution mitigation,unemployment rate and wage inequality in the presence of agricultural pollution

This paper established a small open general equilibrium model to investigate the effects of the changes of consumers' unit private mitigation expenditure on the unemployment rate and the urban-rural wage inequality etc.. We found that (1) in the capital specific case, the increase of unit private mitigation expenditure will not only increase the urban unemployment rate but also expend the urban-rural wage inequality; (2) in the capital movable case, the conclusions are exactly opposite to that of the capital specific case. And under certain conditions, the increase of unit private mitigation expenditure may improve national income. According to the parameter calibration and numerical simulation results of the relevant macroeconomic data of China in 2017, we also found that (3) the effects of the changes of unit private mitigation expenditure on the urban unemployment rate is greater than that of the urban-rural wage inequality; (4) the influence degree of the changes of unit private mitigation expenditure on the unemployment rate in the capital movable case is greater than that of the capital specific case, but the influence degree of the change of unit private mitigation expenditure on the urban-rural wage inequality in the capital movable case is smaller than that of the capital specific case.     

新疆人均收入和收入不平等的增长与收敛——基于空间面板模型

新古典经济增长模型预测,随着时间的推移,人均收入的差距将会缩小,收入不平等将会逐渐趋同。本文利用1995年—2012年新疆15个地州的空间面板数据,采用跨部门模型和空间面板数据模型,并考虑空间交互效应来检验上述预测对新疆的正确性。研究结果显示,在对教育程度、失业、产业构成、人均收入的空间滞后增长以及区域固定效应进行调控之后,人均收入存在条件收敛,而收入不平等则存在无条件收敛。     

全球金融危机:收入分配视角的解读

第三波全球化深刻地影响了全球收入分配的格局。在各个国家内部,收入的不平等程度在加深。发达国家收入不平等导致了宏观经济的金融化和消费者的债务积累。在积极参与全球化进程的新兴工业化国家中,不平等程度的加大压制了国内需求。为了应对金融全球化带来的风险,这些积极参与全球化进程的发展中国家或主动或被动地积累了庞大的外汇储备,从而间接地为发达国家的消费者提供债务融资。这种局面本质上就是一种无法持续的全球化。伴随着美国等发达国家房地产泡沫的破灭,美国次贷危机传导到全世界,演变成全球金融危机。     

Goods Inflation,Asset Inflation,and the Greatest Peacetime Inflation in the US

In every episode of global monetary inflation originating in the Federal Reserve, we find both asset price inflation and goods inflation. The interrelationship between these two types of inflation depends both on cycle-specific factors and more general factors which transcend the cycle and stem from essential aspects of monetary disorder. The purpose of this article is to analyse the nature of this interrelationship and elaborate on the concepts of monetary disorder, goods inflation, and asset inflation. In today’s world of monetary systems where there is no stable demand for high-powered money (which itself is no longer a highly distinct asset) monetary disorder can be hard to recognize until quite late in the inflationary process. Asset price inflation now has a popular meaning quite different from the original found in Austrian business cycle theory. Two decades of widespread inflation targeting at around 2% per annum have encouraged us to ignore an old lesson. In a well-functioning capitalist economy under a sound money order, prices would fluctuate considerably upwards and downwards with a tendency to revert to the mean over the very long run. Finally the principles and hypotheses developed here are analysed in the laboratory of history, specifically for the greatest peacetime inflation in the U.S. (1963–80).     

Income shares and capital formation: patterns of recent developments

The development of the functional income distribution in the advanced capitalist economies of France, Germany, the United Kingdom and the U.S.A. has shown a marked shift towards the profit share during the 1980s. Starting from this observation the impact of changing income shares on capital formation is studied in a post-keynesian framework. Following a model proposed by Bhaduri/Marglin, different patterns of income distribution and capital accumulation are distinguished theoretically and are examined empirically for the manufacturing sectors of the investigated economies. It is concluded that the development of the profit share and the rate of capital accumulation on average over the business cycle implies that the conditions for co-operative “wage-led growth” have been established again during the cycle covering the 1980s, although these opportunities for co-operation have not been realized by supply-side politics.     

Reducing China's regional disparities: Is there a growth cost?

While China's growth has been spectacular over the past 30 years, it has masked growing underlying disparities in the regional distribution of income with coastal provinces growing at a much faster rate than the rest of the country, exacerbating already marked differences in per capita income. Policy focused on addressing these growing disparities has had to face the possibility that spreading growth more evenly around the country will require a sacrifice of the national growth rate. Yet there is almost no empirical evidence that this is so and, if it is, how big the required sacrifice is. This paper contributes to filling this gap by analyzing the relationship between aggregate growth and the inequality of regional output distribution. We use a VAR model to simulate the effects over time on growth of a reduction in inequality and also the effects on inequality of an increase in growth. We find, first, that in the long run a more equal distribution can be obtained without a growth sacrifice. Second, in the short run a reduction in inequality reduces growth. Third, in the short and long runs an increase in growth actually reduces inequality.     

Unionization,market structure,and economic growth

This article investigates the macroeconomic effects of unionization in a Schumpeterian growth model with an endogenous product market structure and a unionized labor market. The endogeneity of the market structure and the trade unionism of the labor market interact and jointly determine the equilibrium unemployment, firm size, number of firms, economic growth, and distribution of income between workers and firms. We show that unionization governs the distribution of income between workers and firms and the unemployment rate, but it does not give rise to any growth effect on the economy. In addition, unionization discourages potential entrants and hence decreases the equilibrium number of firms. These results echo the empirical observation in the sense that unionization raises unemployment and alters the distribution of income between workers and firms, but it does not give rise to a significant, real impact on the firms’ investment and the economy‐wide growth.     

Monetary policy in the euro area: Was it too tight in the 1990s?

This paper studies the monetary policy in the euro area. An important question concerning the euro area is whether the monetary policy has been too tight in the 1990s and in turn, caused the high unemployment rates, in contrast to the economic prosperity and low unemployment rate of the U.S. Therefore, the authors explore what would have happened to the euro economy if the Central Banks had followed either the fixed or time-varying monetary policy rule of the U.S. The paper does find that the European central banks and then later the ECB overreacted to past inflation pressures.     

Structural Changes and Regional Income Inequality in Indonesia: A Bidimensional Decomposition Analysis*

Using the bidimensional decomposition method of a population‐weighted coefficient of variation, this paper analyzes the changes in the determinants of interprovincial income inequality associated with structural changes in Indonesia from 1983 to 2004. The method unifies two inequality decompositions by regional groups and gross regional product components (industrial sectors) and, therefore, enables us to assess the contributions of gross regional product components to within‐region and between‐region inequalities, as well as to overall inequality. As the share of mining has decreased, the spatial distribution of manufacturing has played a more important role in the inequality of Sumatra and Kalimantan, while the primacy of Jakarta, with strong urbanization economies, facilitated by globalization and trade and financial liberalization, has determined much of the Java–Bali region's inequality and, therefore, overall inequality in Indonesia.     

The regional effects of macroeconomic shocks in China

The extent and persistence of the inequality of regional output is an important policy issue in China and its sources have been the subject of considerable empirical research. Yet we have relatively little empirical knowledge of the effects on the regional distribution of output of shocks to national macroeconomic variables such as GDP and investment. This is an important gap in the empirical literature since much government macroeconomic policy seeks to influence GDP using instruments such as investment expenditure. It is likely that such national shocks will have differential regional impacts and so affect the regional output distribution. Policy-makers need to know the sign, size and timing of such effects before making policy decisions at the national level. We simulate the effects of aggregate shocks on individual provinces' GDP within the framework of a vector autoregressive (VAR) model restricted in a manner following Lastrapes (Economics Letters, 2005). We use annual data from 1980 to 2012 to estimate the model which includes 28 of China's provinces and simulate the effects on provincial outputs of shocks to aggregate output and investment. We find great diversity of effects across the provinces with discernible geographic patterns. There is evidence that output shocks benefit coastal provinces with developed industrial structure, export-exposure and less reliance on SOEs; the opposite is found for the effects of an investment shock and we conjecture that this is likely to have been the result of the strong bias in central government investment policy in favour of the interior provinces during a substantial part of our sample period.     

Coping with regional inequality in Sweden: structural change,migrations, and policy, 1860–2000

In many countries, regional income inequality has followed an inverted U‐shaped curve, growing during industrialization and market integration and declining thereafter. By contrast, Sweden's regional inequality dropped from 1860 to 1980 and did not exhibit this U‐shaped pattern. Accordingly, today's regional income inequality in Sweden is lower than in other European countries. We note that the prime mover behind the long‐run reduction in regional income differentials was structural change, whereas neoclassical and technological forces played a relatively less important role. However, this process of regional income convergence can be divided into three major periods. During the first period (1860–1940), the unrestricted action of market forces, particularly the expansion of markets and high rates of internal and international migration, led to the compression of regional income differentials. During the next period (1940–80), regional convergence was even more intense. In this period, institutional arrangements favoured the reduction of productivity differentials across industries and successive governments aided the reallocation of the workforce from declining to thriving regions and economic sectors. During the last period (1980–2000), when regional incomes diverged, internal migration and structural change slowed. Furthermore, the development of knowledge‐intensive service industries favoured economic growth in the main metropolitan areas.     

Business Cycle in China since the Lehman Crisis： Interaction among Macroeconomic Policy,Economic Growth and Inflation

The major objectives of China＇s macroeconomic policy are to stabilize economic growth and inflation, which, in turn, are important factors determining key prices, such as the policy interest rate, the renminbi exchange rate and stockprices. In a framework that distinguishes different phases of the business cycle based on whether the current period＇s economic growth rate and inflation rate are above or below their ＂＇normal＂ values, this paper analyzes the interaction among macroeconomic policy, economic growth and inflation in China since the Lehman crisis, and the implications for these key prices. The path of China＇s economy indicates that stimulus measures taken by the government during the recession phase and tightening measures implemented during the overheating phase have helped minimize the fluctuation over the business cycle. Our analysis shows that Chinese authorities tend to rely more on adjusting the exchange rate than the interest rate to stabilize the economy. Comparing with conditions at the time of the post-Lehman recession, the current slowpace of economie growth in China may reflect not only weakening demand, but also a lowerpotential growth rate associated with the arrival of the Lewis turning point.     

中国城市群金融一体化的宏观经济效应分析

城市群经济是我国目前区域经济发展的主要方式,而城市群金融一体化则是区域经济发展的基础。本文主要从经济增长、通货膨胀和就业三个方面分析了城市群金融一体化的宏观经济效应。从理论层面来看,城市群金融一体化对城市群经济增长和就业问题具有明显的正面效应,而对通货膨胀问题的解决则可能带来不利的影响。