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Evaluating impacts of agriculture-led investments on sub-Saharan African countries’ growth and poverty

ABSTRACT Our main objective in this paper is to evaluate the economy-wide effects of alternative ways of financing expanded government spending on agriculture investments in selected African countries, with a particular focus on inclusive growth. Many African countries are typically, fiscally constrained and underinvest in agriculture despite its high share in economic growth as well as the high proportion of poor people residing in the rural sector. We use macroeconomic models that are then linked sequentially to a microsimulation model to understand the macro-poverty effects of interventions for each country. Government extra-spending on agriculture is financed successively by direct taxes, cuts in other expenditures and external financing. The results reveal that for countries to increase inclusive economic growth, they need to invest aggressively in agriculture and source the concessional finance externally where this option is available. However, it is also worthwhile for countries to explore combined mixes of external and domestic fiscal sources in order to optimise the impacts on inclusive economic growth. Our main contribution to the literature on poverty-growth-inequality triangle lies in the consistent modelling of the general equilibrium effects of the alternative financing mechanisms of agricultural investments for selected African economies.

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Automation, artificial intelligence and capital concentration – A race for the machine

ABSTRACT Since the industrial revolution, productive capital in the form of machines, structures and systems has assumed an ever more dominant role as compared to labour. The owners of non-human productive assets receive a growing share of market-sourced income, with an ever-smaller proportion going to the owners of human labour. The shift between factors of production in favour of capital is exacerbated by technological progress and its embodiment in automation. Academic work on labour’s declining income share has emphasised the role of capital accumulation and capital-augmenting technical change exacerbated by the fast developments of artificial intelligence. At the same time, we observe a peculiar disconnect between this phenomenon and public discourse and interpretation of its social and economic effects: the discussion of automation is focused on its potential effects on employment, micro- and macro-distributive effects are barely mentioned. the discussion of rising inequality is focused on issues of distributive justice; the role of the shift from labour to capital in concentrating wealth is mostly ignored. We argue that to offset the disadvantages of AI/automation and further capital concentration, all citizens should be enabled to (co-)own technology and benefit from the second income source capital ownership provides.

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Housing cost overburden and population health: cross-country evidence from Europe before the pandemic

ABSTRACT The recent surge in housing prices across Europe has placed a considerable financial burden on families, with potential effects across multiple dimensions, including health. This study investigates the relationship between housing cost overburden and self-assessed health status and premature mortality across 26 European Union countries between 2011 and 2019, before the pandemic. We estimate a general health production function using a generalised least squares regression with both robust and Driscoll – Kraay standard errors. We conduct a quantile regression via the method of moments to provide additional insights into the relationship between health and housing cost overburden along the distribution of health variables. Controlling for socio-demographic and economic country profiles, our results confirm that housing cost overburden is associated with worse health status. The association with premature mortality appears to be stronger in countries with lower rates of premature mortality or with a lower share of people reporting lower health status, suggesting that housing cost overburden is an important health determinant. In these well-performing countries, even modest improvements in addressing the housing cost burden may contribute to improve health outcomes.

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