Financial Crises, Poverty, and Income Distribution

January 1, 2002

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Financial Crises, Poverty, and Income Distribution, (USA: International Monetary Fund, 2002) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Developing and transition economies are prone to financial crises, including balance of payments and banking crises. These crises affect poverty and the distribution of income through a variety of channels: slowdowns in economic activity, relative price changes, and fiscal retrenchment, among others. This paper deals with the impact of financial crises on the incidence of poverty and income distribution, and discusses policy options that can be considered by governments in the aftermath of crises. Empirical evidence, based on both macro- and microlevel data, shows that financial crises are associated with an increase in poverty and, in some cases, income inequality. The provison of targeted safety nets and the protection of specific social programs from fiscal retrenchment remain the main short-term propoor policy responses to financial crises.

Subject: Financial crises, Income distribution, Income inequality, National accounts, Personal income, Poverty

Keywords: Currency crash, Distribution indicator, Financial crises, Financial crisis, Household income, Income, Income distribution, Income inequality, Income share, Mexico, Personal income, Poverty, Poverty gap, Poverty headcount ratio, Poverty incidence, WP

Publication Details

Pages:

47
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/004
Stock No:

WPIEA0042002
ISBN:

9781451842050
ISSN:

1018-5941

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