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The aim of this paper is to assess the ability of social spending to smooth output shocks and to provide stabilization. The results show that overall social spending is able to smooth about 16 percent of a shock to GDP. Among its subcategories, social spending devoted to Old Age and Unemployment are those that contribute more to provide smoothing. Moreover, the stabilization effects of social spending are significantly larger in those countries where the size of social spending is higher. The empirical results are economically and statistically significant and robust.

Economics --- United States

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While the COVID-19 pandemic is affecting all countries, output losses vary considerably across countries. We provide a first analysis of robust determinants of observed initial output losses using model-averaging techniques—Weighted Average Least Squares and Bayesian Model Averaging. The results suggest that countries that experienced larger output losses are those with lower GDP per capita, more stringent containment measures, higher deaths per capita, higher tourism dependence, more liberalized financial markets, higher pre-crisis growth, lower fiscal stimulus, higher ethnic and religious fractionalization and more democratic regimes. With respect to the first factor, lower resilience of poorer countries reflects the higher economic costs of containment measures and deaths in such countries and less effective fiscal and monetary policy stimulus.

Labor --- Macroeconomics --- Diseases: Contagious --- Demography --- Institutions and the Macroeconomy --- Financial Crises --- Demographic Economics: General --- Fiscal Policy --- Health Behavior --- Health: General --- Labor Law --- Population & demography --- Infectious & contagious diseases --- Health economics --- Labour --- income economics --- Population and demographics --- Fiscal stimulus --- COVID-19 --- Health --- Labor market regulations --- Population --- Fiscal policy --- Communicable diseases --- Manpower policy --- Bangladesh --- COVID-19 Pandemic, 2020. --- Monetary policy. --- Economic policy.

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While the COVID-19 pandemic is affecting all countries, output losses vary considerably across countries. We provide a first analysis of robust determinants of observed initial output losses using model-averaging techniques—Weighted Average Least Squares and Bayesian Model Averaging. The results suggest that countries that experienced larger output losses are those with lower GDP per capita, more stringent containment measures, higher deaths per capita, higher tourism dependence, more liberalized financial markets, higher pre-crisis growth, lower fiscal stimulus, higher ethnic and religious fractionalization and more democratic regimes. With respect to the first factor, lower resilience of poorer countries reflects the higher economic costs of containment measures and deaths in such countries and less effective fiscal and monetary policy stimulus.

Bangladesh --- COVID-19 Pandemic, 2020. --- Monetary policy. --- Economic policy.

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This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.

Capital movements --- Equality --- Egalitarianism --- Inequality --- Social equality --- Social inequality --- Political science --- Sociology --- Democracy --- Liberty --- Capital flight --- Capital flows --- Capital inflow --- Capital outflow --- Flight of capital --- Flow of capital --- Movements of capital --- Balance of payments --- Foreign exchange --- International finance --- Econometric models. --- Government policy. --- Exports and Imports --- Macroeconomics --- Trade Policy --- International Trade Organizations --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Macroeconomic Analyses of Economic Development --- Current Account Adjustment --- Short-term Capital Movements --- Aggregate Factor Income Distribution --- Personal Income, Wealth, and Their Distributions --- International economics --- Capital account liberalization --- Income inequality --- Capital account --- Personal income --- Income distribution --- National accounts --- Income --- Luxembourg

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This paper provides new empirical evidence of the macroeconomic effects of public investment in developing economies. Using public investment forecast errors to identify unanticipated changes in public investment, the paper finds that increased public investment raises output in the short and medium term, with an average short-term fiscal multiplier of about 0.2. We find some evidence that the effects are larger: (i) during periods of slack; (ii) in economies operating with fixed exchange rate regimes; (iii) in more closed economies; (iv) in countries with lower public debt; and (v) in countries with higher investment efficiency. Finally, we show that increases in public investment tend to lower income inequality.

Foreign Exchange --- Macroeconomics --- Public Finance --- Business Fluctuations --- Cycles --- Expectations --- Speculations --- International Economic Order and Integration --- Energy: Demand and Supply --- Prices --- Energy and the Macroeconomy --- Energy: Government Policy --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- National Government Expenditures and Related Policies: General --- Fiscal Policy --- Public finance & taxation --- Currency --- Foreign exchange --- Public investment spending --- Expenditure --- Exchange rate arrangements --- Fiscal multipliers --- Conventional peg --- Public investments --- Expenditures, Public --- Fiscal policy