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Is the declining pace of innovation lowering productivity & growth?

Vinaya Swaroop's picture

If you have been listening lately to Robert ‘Bob’ Gordon, an economics professor at Northwestern University, he will tell you that the days of great inventions are over. This in turn, has led to a significant slowdown in total factor productivity – a measure that economists use to measure innovation and technical progress. Falling productivity is one of the main reasons for growth shortfall in advanced economies like the United States.

Eager to know more about this seemingly worrisome and pessimistic thesis, which has attracted a lot of attention among economists and the media, we invited Gordon to give a talk at the World Bank.

The microfinance business model: Enduring subsidy and modest profit

Bob Cull's picture

Microfinance institutions aim to serve customers ill-served by traditional commercial banks and thus the associated business model is challenging by definition. And yet the industry has achieved impressive scale reaching 211  million customers globally in 2013. Paradoxically, recent evidence suggests that the benefits of microcredit to borrowers may be modest. For example, six prominent randomized controlled trials found small impacts of access to microcredit on the incomes and consumption levels of marginal borrowers, though the studies found some “potentially important” (though modest) impacts on “occupational choice, business scale, consumption choice, female decision power, and improved risk management.” (Banerjee et al., 2015, p. 14).

Implementing successful reforms: The case of social assistance in South Africa

Lucilla Maria Bruni's picture

South Africa’s social assistance system – through a comprehensive set of cash transfers -- covers nearly 16 million people. This is a big improvement from 1994, when cash transfers reached fewer than three million beneficiaries and suffered from discrimination and weak administration.

Estimates suggest that cash transfers in South Africa raise market incomes of the poor by a factor of 10, far greater than in other middle-income countries, including Brazil - often celebrated for its successful social assistance. Access to safety nets contributed to reducing poverty and inequality and had positive development impacts on health, schooling, and labor supply.

The effects of benchmarks on international capital flows: The problems of passive investing

Sergio Schmukler's picture

The categorisation of countries into relevant international benchmark indices affects the allocation of capital across borders. The reallocation of countries from one index to another affects not only capital flows into and out of that country, but also the countries it shares indices with. This column explains the channels through which international equity and bond market indices affect asset allocations, capital flows, and asset prices across countries. An understanding of these channels is important in preventing a widening share of capital flows being impacted by benchmark effects.

Depressed energy prices playing key role in lowering food commodity prices

John Baffes's picture

Energy prices play a key role in the determination of food prices. The post-2006 boom of food prices was partly driven by higher energy costs, and the weakness in energy prices since 2014 is expected to hold food commodity prices down in the future as well.

Ensuring a sustainable development path

Augusto Lopez-Claros's picture

I’ve suggested recently that although high economic growth in recent decades has greatly improved average life expectancy, infant mortality, and other leading indicators policymakers and development practitioners were still worried about the sustainability of these trends and whether people in developing countries would eventually enjoy the high standards of living of high-income countries. This, against the background of a planet under increasing stress, particularly as a result of climate change. In this blog, I explore some of the actions needed to sustain our global economy.

2016 Oil price forecast revised higher after supply disruptions boost prices in second quarter

John Baffes's picture

The World Bank is raising its crude oil price forecast for 2016 to $43 a barrel from $41 dollars after a 37 percent jump in energy prices in the second quarter due principally to disruptions to supply, particularly from wildfires in northwestern Canada and sabotage of oil infrastructure in Nigeria.

Making politics work for development

Stuti Khemani's picture

Fear of openly confronting politics can come in the way of achieving economic development goals. To help address this problem, the Development Research Group of the World Bank prepared a report synthesizing the vanguard of economics research on the functioning of political markets to understand the implications. It yields insights for strengthening existing transparency and citizen engagement policies with potentially powerful consequences for economic development everywhere, in poor and rich countries alike.

Behavioral economics and social justice: A perspective from poverty and equity

James Walsh's picture

It has been almost ten years since Richard Thaler and Cass Sunstein wrote Nudge, but the revolution in behavioral policymaking is still unfolding.
 
Around the world, behavioral economists and policymakers strive to show that a richer model of human behavior can improve both individual and social welfare in virtually all domains of society.

How long should the week be?

Maya Eden's picture

As agrarian economies modernize, a need emerges for coordination in production. In most countries, production is organized around a seven-day cycle in which five days are designated as workdays and two days are designated as a weekend. Indeed, in the United States, the vast majority of employed persons work during workdays and not during weekends.

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