Zooming in: From Aggregate Volatility to Income Distribution
AbstractIn contrast with a growing literature on the drivers of aggregate volatility in developing countries, its consequences in terms of individual incomes have received less attention. This paper looks at the impact of cyclical output fluctuations and extreme output events (crises) on unemployment, poverty and inequality. We find robust evidence that aggregate volatility has a regressive, asymmetric and non linear impact, as reflected in the strong influence of extreme output drops. Our test shows that, in addition to the mitigating role of personal wealth, public expenditure and labor protection exert a similar benign effect. These findings are in line with the income substitutions view of social safety nets, and cast a new light on the value of social programs and labor market regulation in crisis prone developing countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universidad Torcuato Di Tella in its series Business School Working Papers with number 2007-03.
Length: 36 pages
Date of creation: 2007
Date of revision:
Contact details of provider:
Postal: Miñones 2177 - (1428) Buenos Aires
Web page: http://www.utdt.edu/listado_contenidos.php?id_item_menu=4994
More information through EDIRC
Other versions of this item:
- Calderon, Cesar & Yeyati, Eduardo Levy, 2009. "Zooming in : from aggregate volatility to income distribution," Policy Research Working Paper Series 4895, The World Bank.
- NEP-ALL-2007-12-08 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Broda, Christian, 2004. "Terms of trade and exchange rate regimes in developing countries," Journal of International Economics, Elsevier, vol. 63(1), pages 31-58, May.
- Geert Bekaert & Campbell R. Harvey & Christian Lundblad, 2004.
"Growth Volatility and Financial Liberalization,"
NBER Working Papers
10560, National Bureau of Economic Research, Inc.
- Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June.
- Douglas W. Diamond & Philip H. Dybvig, 2000.
"Bank runs, deposit insurance, and liquidity,"
Federal Reserve Bank of Minneapolis, issue Win, pages 14-23.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- International Monetary Fund, 2002. "Financial Crises, Poverty, and Income Distribution," IMF Working Papers 02/4, International Monetary Fund.
- Arellano, Manuel & Bover, Olympia, 1995.
"Another look at the instrumental variable estimation of error-components models,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 29-51, July.
- M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
- Martín González-Rozada & EduardoLevy Yeyati, 2008.
"Global Factors and Emerging Market Spreads,"
Royal Economic Society, vol. 118(533), pages 1917-1936, November.
- Martín González Rozada & Eduardo Levy Yeyati, 2006. "Global Factors and Emerging Market Spreads," Research Department Publications 4445, Inter-American Development Bank, Research Department.
- Eduardo Levy Yeyati & Martín González Rozada, 2005. "Global Factors and Emerging Market Spreads," Business School Working Papers globalfactorsspreads, Universidad Torcuato Di Tella.
- Easterly, William & Loayza, Norman & Montiel, Peter, 1997.
"Has Latin America's post-reform growth been disappointing?,"
Journal of International Economics,
Elsevier, vol. 43(3-4), pages 287-311, November.
- Easterly, William & Loayza, Norman & Montiel, Peter, 1997. "Has Latin America's post-reform growth been disappointing?," Policy Research Working Paper Series 1708, The World Bank.
- Richard Breen & Cecilia García-Peñalosa, 2005.
"Income Inequality and Macroeconomic Volatility: An Empirical Investigation,"
Review of Development Economics,
Wiley Blackwell, vol. 9(3), pages 380-398, 08.
- Breen, R. & Garcia-Penalosa, C., 1999. "Income Inequality and Macroeconomic Volatility: an Empirical Investigation," Economics Papers 1999-w20, Economics Group, Nuffield College, University of Oxford.
- Breen, R. & Garcia-Penalosa, C., 1999. "Income Inequality and Macroeconomic Volatility: an Empirical Investigation," G.R.E.Q.A.M. 99b11, Universite Aix-Marseille III.
- Eduardo A. Cavallo, 2007.
"Output Volatility and Openness to Trade: A Reassessment,"
Research Department Publications
4518, Inter-American Development Bank, Research Department.
- Eduardo A. Cavallo, 2008. "Output Volatility and Openess to Trade: a Reassessment," Journal of LACEA Economia, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
- Blundell, R. & Bond, S., 1995.
"Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,"
104, Economics Group, Nuffield College, University of Oxford.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- M. Ayhan Kose & Eswar S. Prasad & Marco E. Terrones, 2005. "Growth and Volatility in an Era of Globalization," IMF Staff Papers, Palgrave Macmillan, vol. 52(si), pages 31-63.
- Eduardo Levy Yeyati and Federico Sturzenegger, 2007.
"Fear of Appreciation,"
Business School Working Papers
fearapp, Universidad Torcuato Di Tella.
- Levy-Yeyati, Eduardo & Sturzenegger, Federico, 2007. "Fear of appreciation," Policy Research Working Paper Series 4387, The World Bank.
- Levy-Yeyati, Eduardo & Sturzenegger, Federico & Gluzmann, Pablo, 2007. "Fear of Appreciation," MPRA Paper 42917, University Library of Munich, Germany, revised Nov 2012.
- Levy-Yeyati, Eduardo & Sturzenegger, Federico, 2007. "Fear of Appreciation," Working Paper Series rwp07-047, Harvard University, John F. Kennedy School of Government.
- Agenor, Pierre-Richard, 2002.
"Macroeconomic adjustment and the poor : analytical issues and cross-country evidence,"
Policy Research Working Paper Series
2788, The World Bank.
- Pierre-Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross-Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18, pages 351-408, 07.
- Vivek Arora & Athanasios Vamvakidis, 2005. "How Much Do Trading Partners Matter for Economic Growth?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 24-40, April.
- Paolo Mauro & TÃ¶rbjÃ¶rn I. Becker, 2006. "Output Drops and the Shocks That Matter," IMF Working Papers 06/172, International Monetary Fund.
- Gabriela Inchauste & Ana Corbacho & Mercedes Garcia-Escribano, 2003. "Argentina: Macroeconomic Crisis and Household Vulnerability," IMF Working Papers 03/89, International Monetary Fund.
- Calvo, Guillermo A, 1988. "Servicing the Public Debt: The Role of Expectations," American Economic Review, American Economic Association, vol. 78(4), pages 647-61, September.
- Checchi, Daniele & Garcia-Penalosa, Cecilia, 2004. "Risk and the distribution of human capital," Economics Letters, Elsevier, vol. 82(1), pages 53-61, January.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Â¿QuÃ© he hecho yo para merecer esto? Crecimiento latinoamericano y viento global
by Luciano in Economista Serial Crónico on 2011-12-01 00:58:00
- ¿Qué he hecho yo para merecer esto? Crecimiento latinoamericano y viento global
by Eduardo Levy-Yeyati in Foco Económico on 2011-11-30 12:00:00
- Volatility Drives Income Inequality
by vngalasso in Toppling Inequality on 2012-09-08 12:56:43
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicolás Del Ponte).
If references are entirely missing, you can add them using this form.