Happiness Without a Financial Safety Net: Low Income Predicts Emotional Volatility

Decades of research suggest that money buys very little happiness. However, previous studies have relied on static measures assessing people’s well-being once or on average. We examine the “reel” of people’s emotional lives through over 1 million reports from 23,000 individuals whose happiness was tracked in real-time using a smartphone app. Results show that lower income is associated with increased happiness volatility—a relationship that replicates across multiple operationalizations of volatility, statistical models, and a sample of individuals from six developing countries (N > 25,000). An unsupervised anomaly detection algorithm further revealed that the greatest gap is between how frequent and intense the rich and the poor experience emotional downs, not ups. The happiness gap between the highest and lowest earners during episodes of intense unhappiness was 1.5 to 3 times the size of the gap in average happiness between these two groups. Finally, exploiting the exogeneity of monthly payments, we find that low-income people experience more moments and periods of anomalous happiness the last few days of the month, suggesting a causal relationship between income and happiness volatility.

The global financial safety net: Evolution of the anti-crisis function in the global financial architecture

In the global financial architecture, the functions of anti-crisis support and macroeconomic stabilization are performed by the institutions of the global financial safety net (GFSN). The volume of available financing within the framework of GFNS has grown 10 times over the past decade and reached the equivalent of 4% of world GDP. The literature’s standard understanding of a system of national reserves, swap agreements, regional financial mechanisms, and the IMF requires enlargement. The article proposes the concept of an enlarged global financial safety net, namely by including two new elements — multilateral development banks and bilateral financial support. The manifestations of this phenomenon in many regions of the world are shown in the activities of the largest international development banks and at the level of macroeconomic stabilization financing by individual donor countries, including during the current COVID crisis.