Crisis propagation in a heterogeneous self-reflexive DSGE model

We study a self-reflexive DSGE model with heterogeneous households, aimed at characterising the impact of economic recessions on the different strata of the society. Our framework allows to analyse the combined effect of income inequalities and confidence feedback mediated by heterogeneous social networks. By varying the parameters of the model, we find different crisis typologies: loss of confidence may propagate mostly within high income households, or mostly within low income households, with a rather sharp transition between the two. We find that crises are more severe for segregated networks (where confidence feedback is essentially mediated between agents of the same social class), for which cascading contagion effects are stronger. For the same reason, larger income inequalities tend to reduce, in our model, the probability of global crises. Finally, we are able to reproduce a perhaps counter-intuitive empirical finding: in countries with higher Gini coefficients, the consumption of the lowest income households tends to drop less than that of the highest incomes in crisis times.

“Green” Transformation of the Common Agricultural Policy and Its Impact on Farm Income Disparities

Taking into account the evolution of the Common Agricultural Policy (CAP), it is wondered to what extent the “green” transformation of this policy and the accompanying change in the distribution of direct payments between farms contributed to the elimination of disproportions in agricultural income. The aim of the study was to investigate the changes in the proclaimed concepts related to the development of the EU agricultural sector in terms of their “green” transformation, and to assess the impact of “green” CAP payments on income inequalities between farms. The research was conducted based on the data representative for Polish commercial farms for the years 2004–2019, covering three financial perspectives of the agricultural policy. The methods of counterfactual modelling and assessment of income inequality were used in the study. The analyses showed that the evolution of the CAP priorities, and hence instruments, towards the pro-environmental (or, more broadly, towards sustainability) have so far had a rather negative impact on the income of Polish farms. In its current form, the support dedicated to environmental and climate protection did not fully compensate farmers for income losses resulting from the use of pro-environmental agricultural practices. Moreover, “green” CAP payments did not play a significant role in shaping income inequalities. Therefore, we can conclude that the CAP instruments do not contribute sufficiently to sustainable development (economic, social, and environmental), because they do not support/motivate farmers to change their production standards.

Widening or narrowing income inequalities in myocardial infarction? Time trends in life years free of myocardial infarction and after incidence

Background Despite substantial improvements in prevention and therapy, myocardial infarction (MI) remains a frequent health event, causing high mortality and serious health impairments. Previous research lacks evidence on how social inequalities in incidence and mortality risks developed over time, and on how these developments affect the lifespan free of MI and after MI in different social subgroups. This study investigates income inequalities in MI-free life years and life years after MI and whether these inequalities widened or narrowed over time. Methods The analyses are based on claims data of a large German health insurance provider insuring approximately 2.8 million individuals in the federal state Lower Saxony. Trends in income inequalities in incidence and mortality were assessed for all subjects aged 60 years and older by comparing the time periods 2006–2008 and 2015–2017 using multistate survival models. Trends in the number of life years free of MI and after MI were calculated separately for income groups by applying multistate life table analyses. Results MI incidence and mortality risks decreased over time, but declines were strongest among men and women in the higher-income group. While life years free of MI increased in men and women with higher incomes, no MI-free life years were gained in the low-income group. Among men, life years after MI increased irrespective of income group. Conclusions Income inequalities in the lifespan spent free of MI and after MI widened over time. In particular, men with low incomes are disadvantaged, as life years spent after MI increased, but no life years free of MI were gained.

Social Unemployment Insurance: A case (more or less) in favour

Budget 2021 announced a social unemployment insurance (SUI) system, to be developed in partnership with BusinessNZ and the New Zealand Council of Trade Unions, and modelled on the accident compensation (ACC) scheme. This new policy addresses the needs of workers involuntarily laid off as industries restructure and seek new skills. This article considers concerns raised about the SUI proposal, drawing comparisons with the ACC experience. While SUI would perpetuate market income inequalities and may not do much to prevent poverty, it could also reduce other sources of inconsistency and disadvantage.

Dohodovne nejednakosti i redistributivne preferencije u Hrvatskoj i zemljama EU-a: makroanaliza

INCOME INEQUALITIES AND REDISTRIBUTIVE PREFERENCES IN CROATIA AND EU COUNTRIES: MACRO ANALYSIS Department of Social Work, Faculty of Law, University of Zagreb Zagreb, Croatia The paper analyses the relationship between income inequalities and redistributive preferences. The objectives have been: determine to which degree income inequalities are associated with redistributive preferences, which are the correlates of redistributive preferences on the macro level and which mechanisms of redistribution have been preferred by citizens in the EU countries. Aggregated data from two special Eurobarometer surveys (2010 and 2018) were used as the data source on redistributive preferences, while macro-statistical indicators were taken from the Eurostat database. Bivariate correlational analyses, linear regression and the cluster analysis were used for data processing. A general finding is that redistributive preferences are high in almost all EU countries. It seems that an increase of income inequalities is not the key factor of high redistributive preferences, but it is the perception of income inequalities and the sensitivity of citizens towards income inequalities. Citizens in the EU countries often incorrectly perceive the level of inequalities in society and their place on the income scale. The respondents from post-socialist countries have a larger “aversion” towards income inequalities and want a stronger role of the government in the redistribution and social life. Inhabitants of the EU countries support all key mechanisms of income redistribution (taxes, education, social protection and minimum wage), but they give the largest support to the tax system and the progressive taxation of the wealthy, while there are a lot of suspicions regarding fully free education. Key words: income inequalities, redistributive preferences, European Union, redistributive mechanisms, social justice.