Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers

Fox, Louise

doi:10.5089/9781484369968.001

Cited by 7 publications

(6 citation statements)

References 17 publications

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“…( 2 ) While limited financial participation is a prominent feature of LIC economies, the assumption of segmented labour markets-implying complete labour immobility at business-cycle frequencies-is at odds with the informal and fluid nature of LIC labour markets (Fox, 2015) and with our reading of the evidence on structural transformation in LICs (Gollin et al, 2013 andIMF, 2012). We therefore allow for full labour mobility for the bulk of our analysis.…”

Section: Resultsmentioning

confidence: 99%

Implications of Food Subsistence for Monetary Policy and Inflation

Portillo

Zanna²,

O’Connell³

et al. 2016

IMF Working Papers

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The chapter introduces subsistence requirements in food consumption into a simple New Keynesian model with flexible food and sticky non-food prices. It shows how the endogenous structural transformation that results from subsistence affects the dynamics of the economy, the design of monetary policy, and the properties of inflation at different levels of development. A calibrated version of the model encompasses both rich and poor countries and broadly replicates the properties of inflation across the development spectrum, including the dominant role played by changes in the relative price of food in poor countries. The authors derive a welfare-based loss function for the monetary authority and show that optimal policy calls for complete (in some cases nearcomplete) stabilization of sticky-price non-food inflation, despite the presence of a food-subsistence threshold. Subsistence amplifies the welfare losses of policy mistakes, however, raising the stakes for monetary policy at earlier stages of development.

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Section: Resultsmentioning

confidence: 99%

Implications of Food Subsistence for Monetary Policy and Inflation

Portillo

Zanna²,

O’Connell³

et al. 2016

IMF Working Papers

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“…Diversifying into non-farm economic activities is another way to minimize the food insecurity risk that households in northern Ghana face. Several studies (see [17]- [21]) have shown that rural farm households that combine their farming activities with non-farm income activities are better able to smooth income and consumption. In other words, having a diversified portfolio of income generating activities (and hence a diversified set of income sources) is a sure way to minimize income variability and to ensure a minimum level of income [18].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Nonfarm Activities on Rural Farm Household Income and Food Security in the Upper East and Upper West Regions of Ghana

Osarfo¹,

Senadza²,

Nketiah‐Amponsah³

2016

TEL

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Research shows that participation in rural non-farm activities exerts a pronounced impact on agriculture, household farm decisions, rural development, income and welfare as well as household food security. This paper investigates the impact of participation in non-farm activities on household income and food security among farm households in the Upper East and Upper West Regions of Ghana. Using the Recommended Daily Calorie Required (RDCR) approach, the study finds that 45 percent of households in the two regions are food insecure. Propensity score matching (PSM) results indicate that participation in non-farm work has significant positive effect on household income and food security status. The policy implications of the findings are discussed.

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“…Hiring for wage jobs often occurs through informal channels. Employers put out the word that they are hiring and rely on referrals from existing employees to …ll the jobs (Funkhouser, 1997a;Fields, 2011b;Fox 2015, Tansel et al, 2015. We do not attempt to model the role played by friend-family-kinship networks in the labor market.…”

Section: C3 Sectoral Labor Supplymentioning

confidence: 99%

“…The equivalent urban unemployment rate, calculated using the o¢ cial government de…nition, is 12:9 percent. 40 Fox (2015) reports that the range is 11 -15 percent in most of Sub-Saharan Africa.…”

Section: Domestic Debt (B)mentioning

confidence: 99%

Debt, Investment, and Growth in Developing Countries with Segmented Labor Markets

et al. 2020

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We introduce a new suite of macroeconomic models that extend and complement the Debt, Investment, and Growth (DIG) model widely used at the IMF since 2012. The new DIG-Labor models feature segmented labor markets, efficiency wages and open unemployment, and an informal non-agricultural sector. These features allow for a deeper examination of macroeconomic and fiscal policy programs and their impact on labor market outcomes, inequality, and poverty. The paper illustrates the model's properties by analyzing the growth, debt, and distributional consequences of big-push public investment programs with different mixes of investment in human capital and infrastructure. We show that investment in human capital is much more effective than investment in infrastructure in promoting long-run economic development when investments earn their average estimated returns. The decision about how much to invest in human capital versus infrastructure involves, however, an acute intertemporal trade-off. Because investment in education affects labor productivity with a long lag, it takes 15+ years before net national income, the private capital stock, real wages for the poor, and formal sector employment surpass their counterparts in a program that invests mainly in infrastructure. The ranking of alternative investment programs depends on the policymakers' social discount rate and on the weight of distributional objectives in the social welfare function.

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Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers

Cited by 7 publications

References 17 publications

Implications of Food Subsistence for Monetary Policy and Inflation

Implications of Food Subsistence for Monetary Policy and Inflation

The Impact of Nonfarm Activities on Rural Farm Household Income and Food Security in the Upper East and Upper West Regions of Ghana

Debt, Investment, and Growth in Developing Countries with Segmented Labor Markets

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