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The Centre for Growth and Business Cycle Research

Discussion papers 2018

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Agénor, P-R.,  (2018). 'A Theory of Social Norms, Women's Time Allocation, and Gender Inequality in the Process of Development', Centre for Growth and Business Cycle Research Discussion Paper Series, University of Manchester, No. 237.

This paper studies how social norms influence gender bias in the workplace and in the family, how these two forms of discrimination interact among themselves and with intra-household bargaining, and how gender norms evolve in the course of development. The presence of women in the labor market is a key determinant of the degree of gender bias in the workplace. Household preferences towards girls' education depend on women's bargaining power which, through the male-female wage gap, depends itself on gender bias in the labor market. Experiments with a calibrated version of the model for a stylized low-income country show that interactions between social norms, women's time allocation, and gender gaps are a critical source of growth dynamics. Initial measures aimed at mitigating the influence of discriminatory norms regarding gender roles in the workplace and in the family can magnify over time the benefits of standard policy prescriptions (aimed for instance at fostering childhood education) in promoting development and gender equality.

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Bratsiotis, G.J.,  (2018). 'Credit Risk, Excess Reserves and Monetary Policy: The Deposits Channel', Centre for Growth and Business Cycle Research Discussion Paper Series, University of Manchester, No. 236.

This paper examines the role of the precautionary demand for liquidity and the interest on reserves as two potential determinants of the deposits channel that can help explain the role of monetary policy, particularly at the near zero-bound. At high levels of precautionary liquidity hoarding the optimal policy response of a Taylor rule is shown to indicate a zero weight on inflation. This result is explained by the effect that the demand for liquidity has on the deposit rate which determines the intertemporal choices of households. Similarly, through its effect on the deposits channel the interest on reserves can act as the main tool of monetary policy, that is shown to provide higher welfare gains in relation to a simple Taylor rule. This result is shown to hold at the zero-bound and it is independent of the precautionary demand for liquidity, or fiscal theory of the price level properties.

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