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This study used the panel data from 15 emerging markets to examine the impact of restrictive macroprudential policies on income inequality from 2000–2019 using Bayesian panel vector autoregression and Bayesian panel dynamics generalised method of moments models. The chosen models are suitable for addressing multiple entity dynamics, accommodating a wide range of variables, handling dense parameterisation, and optimising formativeness and heterogeneous individual-specific factors. The empirical analysis utilised various macroprudential policy proxies and income inequality measures. The results show that when the central banks tighten systems using macroprudential policy instruments to sticker debt-to-income and financial instruments for lower-income borrowers (the bottom 40% of the income distribution), they promote income inequality in these countries while reducing income inequality for high-income borrowers (the high 1 percent of the income distribution). The impact of loan-to-value ratios was found to be insignificant in these countries. Fiscal policy through government expenditure and economic development reduces income inequality, while money supply and oil-price shocks exacerbate it. The study suggests implementing a progressive debt-to-income (DTI) ratio system in emerging markets to address income inequality among lower-income borrowers. This would adjust DTI thresholds based on income brackets, allowing lenient credit access for lower-income borrowers while maintaining stricter limits for higher-income borrowers. This would improve financial stability and reduce income disparities. Additionally, targeted financial literacy programs and a petroleum-linked basic income program could be implemented to distribute oil revenue to lower-income households. A monetary supply stabilisation fund could also be established to maintain financial stability and prevent excessive inflation. [ABSTRACT FROM AUTHOR]

The welfare effects of government redistributive policy have been subject to considerable debate for decades. Against this background, this study explores the effect of government social spending on an empirically constructed measure of well-being in a panel of 16 upper middle-income countries and 38 high-income countries observed between 2002 and 2019. The study utilises the Generalised Method of Moments (GMM) Model to estimate the empirical relationship between government social spending and well-being. The results suggest that welfare gains in upper middle-income countries are derived from redistributive spending that prioritises schooling. On the other hand, rich countries are more likely to benefit from health-related spending. Based on the results the study confirms that disaggregated social spending in upper middle-income nations and wealthy nations does not impact aggregate well-being uniformly. Therefore, efforts to improve aggregate welfare through government redistributive spending ought to consider these attendant heterogeneities. IMPACT STATEMENT: This study examines the association between government social spending and well-being using a panel dataset of 54 upper middle-income and high-income countries. The novel feature of this investigation is embedded in the construction of the aggregate well-being index. We employed the Principal Components Analysis (PCA) technique to build a composite well-being index. This well-being indicator incorporates age dependency, access to water, access to sanitation, and life expectancy, the institutional quality is measured by four indicators which are government effectiveness, control of corruption, political stability and rule of law, environment degradation (CO2 emissions) and economic growth (GDP). This approach is expected to contribute substantially to the scarce literature in the field of well-being in upper middle-income countries and higher-income countries. A focus on well-being research is important since improved well-being leads to a better quality of life and stimulates economic performance through its influence on human development. The findings suggest that welfare gains in upper middle-income economies are attributed to social spending that prioritizes education. In contrast, wealthy countries are more likely to benefit from health-related spending. Policymakers should develop redistributive policies that address the specific needs of each region since evidence demonstrates that disaggregated social spending in upper middle-income countries and wealthy nations does not influence aggregate well-being uniformly. [ABSTRACT FROM AUTHOR]

Focuses on monetary policy in South Africa. Description of the South African Reserve Bank and its powers; Information on the socio-economic and political constraints on the monetary policy for the country; Future directions of monetary policy.