Working Papers
Financial crises are common in market economies. While the
initial impact of a crisis is harmful for an economy, recent research
suggests that risky behavior of investors - one of the main causes of
crises - can have long-run positive impacts for an economy through
increased investment during non-crisis times. On average, the long-run
positive effect of this investment has been found to be greater than
the initial decreases in wealth during a crisis; rare crises are in
fact beneficial to economies. However, this positive effect is not
necessarily equal for all groups within a nation. This paper explores
how rare, systemic economic crises affect inequality within nations.
Rare crises are found to significantly increase inequality, even when
controlling for the income level of nations. Crises lead to an increase
in the income share of the top 20% of people in a nation, while they
have a negative effect on the share of income of the lowest 40% large
enough to suggest that the poor receive no, or even negative, benefit
from the positive effects of investment growth. This differential
effect is found to be partly due to a quick return of financial profits
and a decrease in the growth rate of employment after a crisis.
Households in Conflict Network
(HiCN) Working Paper 65
Over 21 million people are currently forced to live in internally
displaced person (IDP) camps around the world. The consequences of such
a movement of people has meant a severe impact on the populations,
though little is known about the exact impact on health, mortality
rates and livelihoods of this forced migration. The conflict in
northern Uganda offers the opportunity to use exogenous variation in
forced movement in order to control for endogenous factors and thus
give unbiased estimates of the cost of movement. In the short-term,
forced movement has had a significant positive impact on mortality
rates through improved access to health care but a significant negative
effect on the assets and consumption patterns of the people. This could
have important implications on the long-term success of the people.
