Inequality and the Pandemic

Inequality and the Pandemic
This assignment combines insights from all lectures. The assignment aims to enhance your understanding on current economic topics.
The unfolding pandemic and the associated economic downturn have hit countries at times of record-high inequality. Besides, tentative works using data of the past year suggest that the precrisis trend of rising concentration of income and wealth may even accelerate. Others, however, argue that the emphasis on health, coupled with rising awareness of the challenges that inequality poses to modern societies, will push governments to change route, pursue social welfare policies that eventually slow down inequality’s pace.
You should choose one country -emerging/developing, frontier, or industrial, except the United States (as we will discuss in detail US patterns on income/wealth distribution and ongoing policies). The first part of the assignment is documenting and understanding pre-pandemic trends on income/wealth inequality. The second part zooms at the past year. The main task is documenting and understanding how different “groups” coped with the pandemic and thus grasp how inequality evolved. The third, more speculative part regards projecting the post-crisis recovery, thinking not only about average output (investment, employment, income) growth, but also the dynamics of inequality. The assignment consists of the following steps

1. Pre-Covid Inequality and Trends
Describe the patterns and dynamics of income (or/and wealth) inequality before the pandemic (until say the end of 2019)
Specifically
a. Present some statistics illustrating the inequality before the crisis. You may want to
distinguish between inequality at the top and the bottom of the income distribution. You
may also discuss trends
b. Discuss its main origins. List no more than five of the main factors, but focus on the two most important ones. Please distinguish between global driving forces (applying to most countries) and country-specific ones.
c. Please discuss some (no more than three) country-specific policies that may have
contributed to the spike or slow-down of inequality.

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2. The Pandemic
Let us now zoom into the past year.
a. Please discuss the impact of the pandemic on the macroeconomy (output, income,
employment growth). Focus on average impact.
b. Why has the impact been higher or lower compared to other countries in the region or of the same income?
c. Please present any evidence on the evolution of inequality during the pandemic. Which
individuals and groups got impacted the most and which the least? You may also want to
distinguish by ethnicity, race, besides income groups and professions-occupations
d. Discuss some (no more than three) policies of the past year that have either helped or
harmed middle-income and low income households

3. Looking into the Future
As macroeconomists often do (unsuccessfully), let us know turn to forecasting.
a. What is your view on the recovery and why? Please discuss the role of policies and the
global environment in your projection
b. How about the dynamics of income inequality after the pandemic? Do you expect it will
remain steady, accelerate or fall? Please explain why

Web sources: use only the one stated here.
• VOXEU website: www.voxeu.org
• VOXU-CEPR. Economics in the Time of Covid-19. https://voxeu.org/pages/covid-19-page
• IMF/World Bank country reports.
• PS Mission Recovery. https://www.project-syndicate.org/bigpicture/mission-recovery
• IMF World Economic Outlook and Data. https://www.imf.org/en/Publications/WEO
• World Inequality Database. https://wid.world/
• Deaton, Angus. (2021). Covid-19 and Global Income Inequality. Princeton University

Remarks
• You CANNOT focus on the United States, (China is preferred but not mandatory).
• Please cite any work (policy report, academic paper, etc) that you use. Please also add
hyperlinks to your citations.
• You can use tables from reports or academic papers with proper citation.
• You should not mechanically reproduce some results/insights of others.
• Maximum 10 pages; 1.5 spaced. Including graphs. (bibliographic references may be in
additional pages)
• Maximum 5 graphs. The graphs should be readable; do not shrink them so as to save space.
• No appendix; just bibliography.
• For every question answered use the bullet point associated to it

For more information on Inequality and the Pandemic read this:https://en.wikipedia.org/wiki/Social_impact_of_the_COVID-19_pandemic

Inequality and the Pandemic

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