Asia’s Quest for Inclusive Growth Revisited

Chie Aoyagi and Giovanni Ganelli

No 2015/042, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; Asia; monetary policy; Gini coefficient; poverty; fiscal policy; Inclusive growth; inequality; economic growth; indifference curve; aggregate Gini Index; absolute poverty; poverty-reducing effect; monetary policy variable; poverty rate; income share; level of significance; policy implication; Income inequality; Fiscal redistribution; Poverty reduction; Income distribution; Asia and Pacific; East Asia; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 29
Date: 2015-02-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=42742 (application/pdf)

Related works:
Journal Article: Asia's quest for inclusive growth revisited (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2015/042

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().