Search Results

You are looking at 1 - 10 of 14 items for :

  • "lagging region" x
Clear All
William Gbohoui, Mr. Waikei R Lam, and Victor Duarte Lledo
Growing regional inequality within countries has raised the perception that “some places and people” are left behind. This has prompted a shift toward inward-looking policies and away from pro-growth reforms. This paper presents novel stylized facts on regional inequality for OECD countries. It shows that regional disparity in per-capita GDP is large (even after adjusting for regional price differences), persistent, and widening over time. The paper also finds that rising nationwide income inequality is associated with both rising within-region income inequality and widening average income across regions. The rise in inequality is related to declining incentives for interregional labor mobility, especially for poor households in lagging regions, which are estimated to reduce by as much as one-third in the United States. Against these facts, the paper proposes a framework to identify whether, how and by whom fiscal policies can be used to tackle regional inequality. It outlines conditions under which those policies should be spatially-targeted and illustrates how they can be complementary to conventional means-testing methods in mitigating income inequality.
Mr. Athanasios Vamvakidis
The theoretical literature has argued that a centralized wage bargaining system may result in low regional wage differentiation and high regional unemployment differentials. The empirical literature has found that centralized wage bargaining leads to lower wage inequality for different skills, industries and population groups, but has not investigated its impact on regional wage differentiation. Empirical evidence in this paper for EU regions for the period 1980-2000 suggests that countries with more coordinated wage bargaining systems have lower regional wage differentials, after controlling for regional productivity and unemployment differentials.
Mr. Holger Floerkemeier and Mr. Nikola Spatafora
We discuss regional disparities in economic performance and living standards. We first set out some key facts, and provide a conceptual framework to help analyze whether such disparities are efficient, or instead reflect market and/or policy failures. We examine whether policy attempts to reduce regional disparities necessarily involve a trade-off between equity and efficiency. We then investigate whether policymakers should focus on boosting the economic performance of lagging regions—or, conversely, accept the presence of regional disparities, and instead assist households in lagging regions through transfer payments, investments in education, health, and other basic services, and by facilitating out-migration.
International Monetary Fund
The Selected Issues paper provides an estimate of the output gap and potential output for Italy, and examines the sensitivity of the results to assumptions regarding employment and productivity growth. The paper focuses on the labor market more directly by examining the linkages between wage bargaining systems, regional wage differentiation, and regional unemployment disparities. It also provides an assessment of the government’s tax reform program, including its potential to increase incentives for employment and investment.
International Monetary Fund
This 2009 Article IV Consultation highlights that Thailand has been in an investment slump since 2006. Political turmoil has led to reduced business confidence and slow private investment growth. The main engine of growth for the economy has been the export sector. The authorities have focused on fiscal measures to stimulate the economy since the second half of 2008. Executive Directors have welcomed the authorities’ fiscal stimulus plans, and underscored that timely and efficient implementation of these plans is critical at the current juncture.
International Monetary Fund. External Relations Dept.
This paper describes the technical improvement in developing countries. It highlights that developing countries have relied heavily for their industrial development upon foreign enterprises as sources of technology and management systems. The paper underscores that through direct investment or under licensing arrangements, foreign corporations have supplied a vast array of industrial products and equipment and have exercised a major role in the design and construction of processing and manufacturing facilities in newly industrializing countries.
Mr. Athanasios Vamvakidis

with high unemployment variation. A negative economic shock will increase unemployment in the lagging region without affecting wages, while the same shock in the leading region will reduce wages. As a result, the impact of a negative shock on employment will be smaller in the leading region and will not last as long as in the lagging region. If local wages were determined by local economic conditions, then temporary asymmetric economic shocks would not cause permanent regional unemployment disparities. 5 Some empirical evidence are in support of this argument

Albert Waterston

and delays in locating projects and high costs from uneconomic decisions about location. The evidence also reveals that attempts to induce growth in a lagging region by locating projects in areas which lack the minimal physical and human infrastructure required to support the projects, are likely to yield only modest benefits. There is also the problem of defining what a region is. What is called a region tends to vary from country to country and within a country. In general, the appropriate size of a region is one which is not so small as to lead to undue

Mr. Holger Floerkemeier and Mr. Nikola Spatafora

many firms might be collectively profitable, but the market mechanism cannot achieve this. This is because, while each firm creates benefits for other firms, these do not enter its decision taking. It follows that even large wage differences between regions may be insufficient to induce firms to locate in a lagging region, rather than in an established center. A further implication is that there are threshold effects and ‘tipping points’. Policy changes below some threshold may be wholly ineffective, while a ‘big-push’ of policy across a range of actions may stand a

International Monetary Fund

decision process they may be less powerful than the employers in the leading regions. 65. In a country with a centralized wage bargaining system and with wages determined by the leading region, low wage dispersion could coexist with high unemployment variation. A negative economic shock will increase unemployment in the lagging region without affecting wages, while the same shock in the leading region will reduce wages. As a result, the impact of a negative shock on employment will be smaller in the leading region and will not last as long as in the lagging region. If