World Economics

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The Informal Economy: Who Wins, Who Loses and Why We Care
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Giovanna Maria Dora Dore, World Economics, March 2019
The informal economy is one of the most complex economic and political phenomena of our time. It exists in rich and poor countries alike, and currently employs almost half of the world’s workers, about 1.8 billion people. •At a value of US$10 trillion, the informal economy is the second-largest economy in the world, after the economy of the United States (at US$14 trillion) and before that of China (at US$8.2 trillion). High taxes, labour costs and social security infrastructures, undeclared work and underreporting are among the most powerful drivers of informality. Measures promoting behavioural changes can help counter its growth, even though controls and penalties remain more popular as tools in the fight against the informal economy. The informal sector remains the fastest-growing part of the world economy and we need a better understanding of what it means for business and society and why it is the preferred operating sector for many entrepreneurs.
Inequality: Concepts, Data, Perspectives and Solutions
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Michael Chibba & John M. Luiz, World Economics, March 2019
A comprehensive treatise on inequality from economic, social, business and metrics/data perspectives is lacking in the literature and this treatise fills that void. We posit that: (a) neoclassical economics has failed to address inequality within nations; (b) the social theories on inequality are of ancillary importance; (c) businesses have contributed to inequality in several ways but have also made a positive contribution towards a fairer, more equitable society; (d) data on inequality is not up to date. Taxation and social programs offer an inadequate approach to tackling inequality without a proper framework and supporting approaches. In addition, complementarity between neoclassical economics and behavioural economics would be a positive factor in addressing inequality and should be pursued. Issues of inequality metrics and data reliability have moved to the forefront of discussions as the data currently available is the basis of much dissent. Robust metrics and reliable and up to date inequality data (as well as related statistics) are indispensable for designing, implementing, monitoring, and evaluating inequality interventions and policies.

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