Asia’s Quest for Inclusive Growth Revisited

February 26, 2015

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Chie Aoyagi, and Giovanni Ganelli. Asia’s Quest for Inclusive Growth Revisited, (USA: International Monetary Fund, 2015) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Despite the rapid economic growth and poverty reduction, inequality in Asia worsened during last two decades. We focus on the determinants of growth inclusiveness and suggest options for reform. A cross cross-country empirical analysis suggests that fiscal redistribution, monetary policy aimed at macro stability, and structural reforms to stimulate trade, reduce unemployment and increase productivity are important determinants of inclusive growth. The main policy implication of our analysis is that there is still room to strengthen such policies in Asia to better achieve growth with shared prosperity. In particular, scenario simulations based on our results suggests that the effect of expanding fiscal redistribution on inclusive growth could be sizeable in emerging Asia, since the estimated improvement in our proxy of inclusive growth – a measure of growth in average income “corrected” for the equity impact—ranges from about 1 to about 8 percentage points.

Subject: Economic growth, Fiscal redistribution, Inclusive growth, Income distribution, Income inequality, National accounts, Poverty, Poverty reduction

Keywords: Absolute poverty, Aggregate Gini Index, Asia, Asia and Pacific, East Asia, Economic growth, Fiscal policy, Fiscal redistribution, Gini coefficient, Inclusive growth, Income distribution, Income inequality, Income share, Indifference curve, Inequality, Level of significance, Monetary policy, Monetary policy variable, Policy implication, Poverty, Poverty rate, Poverty reduction, Poverty-reducing effect, Sub-Saharan Africa, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/042
Stock No:

WPIEA2015042
ISBN:

9781498340144
ISSN:

1018-5941

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