Monetary Policy and the Diversification–Profitability Linkage in Banking: Evidences from Emerging Market Economies

In previous studies, the stance of monetary policy is proven to associate with banking profitability or activities. This paper provides empirical evidence aiming at the influence of monetary policy, including stances of expansionary and contractionary monetary policies, on the relationship between banks' income diversification and their profitabilities in emerging market economies. We find the significant evidence that expansionary monetary policies can raise banks' diversification efforts, whereas contractionary monetary policies weaken the efforts of banking diversification, for which our most robustness tests support these findings. There are some relevant implications and suggestions for bank managers and policymakers.     

Dynamics of Growth,Poverty and Inequality: A Panel Analysis of Regional Data from Thailand and the Philippines*

Using panel data for provinces compiled from household expenditure microdata, the present paper empirically investigates the relationships among growth, poverty and inequality in Thailand and the Philippines. The empirical model avoids the potential bias due to the fact that the entire distribution of individual‐level consumption changes over time and empirical variables for growth, poverty and inequality are often compiled from the consumption distribution. The system generalized method of moments estimation results strongly suggest that inequality reduced the growth rate of per‐capita consumption, and that differences in inequality explain a substantial portion of the Philippine–Thai difference in growth and poverty reduction since the late 1980s.     

Socioeconomic Changes and the Decline in Poverty: A View from Three Villages in the Philippines, 1985–1997*

The present paper examines socioeconomic changes and decline in rural poverty using a panel dataset collected in the Philippine villages in 1985, 1993 and 1997. The most important finding is the transition of the rural economy away from a regime of low nonfarm income to a regime of high nonfarm income accompanied by a marked decline in poverty. The relative contribution of access to land on rural poverty reduction declined, whereas the relative contribution of human capital, more importantly represented by college schooling, increased over time.     

Motivation of Parent–Child Co‐residence Behavior: Evidence from the China Health and Retirement Longitudinal Study

This paper examines the motivations of parent‐child co‐residence behavior in China using data from the China Health and Retirement Longitudinal Study. We test three possible motives: social norms, self‐interest and altruism. We find that social norms play an important role in household co‐residence behavior, showing that the belief that “sons take care of parents” is strong, and children in different birth orders take different responsibilities. Taking the one‐child policy as a natural experiment, we compared co‐residence behavior between only‐child and multi‐child families. This allowed us to test whether children in multi‐child families with wealthier parents more often co‐reside in order to compete for a bequest. We find that parents' wealth is more appealing to children in multi‐child families. The results support the life cycle theory that co‐residence decisions are motivated by self‐interest. We also find some evidence of altruism when parents and children make co‐residence decisions. These findings provide some insights for designing future elder‐support policies in China.     

Expenditure Inequality in Indonesia, 2008–2010: A Spatial Decomposition Analysis and the Role of Education

Based on the 2008–2010 Susenas panel data, this study examines expenditure inequality from spatial perspectives in Indonesia, using three decomposition methods: (i) a conventional Theil index decomposition; (ii) an alternative Theil index decomposition proposed by Elbers et al. (2008); and (iii) the Blinder?Oaxaca decomposition. Our results show that overall inequality in per capita expenditure increases between 2008 and 2010, which coincides with a rising trend in the official Gini coefficient. The contribution of inequality within urban and rural areas to total inequality is larger than that of inequality between urban and rural areas. Looking within urban and rural areas, urban inequality is significantly higher than rural inequality. Java‐Bali in particular records very high urban inequality. Overall, urban inequality increases, urban–rural inequality remains stable, rural inequality decreases, and inequality at the national level increases. Although urban–rural inequality has a relatively low share in overall inequality, the share is not small enough to ignore its impact. Furthermore, when using the alternative decomposition method, the contribution of urban–rural inequality increases substantially. The present study also found that educational differences appear to have played an important role in expenditure inequality within urban areas and between urban and rural areas.