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This paper presents estimates of the relationship between the share of income accruing to the middle class and gross domestic product per capita of economies from the Association of Southeast Asian Nations. The increase in gross domestic product per capita that these economies experienced during 1970-2010 significantly contributed to a higher share of income accruing to the middle class. The impact of the rise of the middle class on economic growth depends on the countries' initial level of gross domestic product per capita. In the majority of these countries, a rise of the middle class that is unrelated to gross domestic product per capita growth would have had a significant negative effect on economic growth, based on the values of the countries' gross domestic product per capita in 1970. In contrast, for recent values of gross domestic product per capita, a rise of the middle class would positively contribute to growth in gross domestic product per capita. The paper shows that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.

Asean --- Economic Growth --- Income Inequality

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After a growth slowdown that lasted six years, the Latin America and the Caribbean (LAC) region has finally turned the corner and resumed growth at a modest rate of 1.1 percent in 2017 and 1.8 percent expected in 2018. This reflects a more favorable external environment, particularly a recovery in commodity prices. In spite of the benign external environment, most LAC countries still face a fragile fiscal situation. While gradual fiscal adjustments have started in several countries, most countries are still running fiscal deficits and debt levels are high. Further fiscal consolidation is needed to preserve the substantial gains achieved by the region in recent times, in terms of lower inflation, less poverty and inequality, and inclusive growth. This Semiannual Report analyzes the complex decisions regarding fiscal adjustment policies.

Elasticity --- Growth --- Household Income Inequality --- Inequality --- Labor Force Participation --- Labor Income Inequality --- Slowdown --- Terms Of Trade --- Unemployment --- Latin America

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As usual, Chapter 1 of the report covers the short-term prospects and provides an analysis of the external factors affecting the region's economic slowdown. The focus is on the adjustment challenges faced by those Latin American countries experiencing a major adverse terms of trade shock, which comes after an unprecedented (in magnitude and duration) period of terms of trade bonanza. Chapter 2 discusses the key topic of this semiannual report, that is, the implications of the slowdown for labor markets - on jobs and wages. We describe the broad labor market trends observed during the boom and contrast them with the patterns observed during the slowdown. We also describe the implications of the slowdown for inequality. A corollary of the observed labor market patterns during the slowdown is that some of the gains towards greater income equality achieved in the past decade or so may be reversed, at least in part, and that we may see a divergence between labor income inequality and household income inequality, whereby the latter may rise more than the former.

Elasticity --- Growth --- Household income inequality --- Inequality --- Labor force participation --- Labor income inequality --- Slowdown --- Terms of trade --- Unemployment --- Latin America

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After a growth slowdown that lasted six years (including a contraction of 1.3 percent last year), the Latin American and Caribbean (LAC) region is finally expected to resume positive growth in 2017, with market analysts forecasting real GDP growth of 1.2 percent for 2017 and 2.3 percent for 2018. The recovery, particularly in South America, will be led by a strong rebound in Argentina, which is expected to grow by 2.8 percent in 2017 and 3.0 percent in 2018, and Brazil, which is expected to resume positive growth as well, expanding by 0.7 percent in 2017 and 2.3 in 2018, after contracting for two consecutive years. The usual external drivers of growth (particularly commodity prices, and growth in China and U.S.) are expected to remain relatively neutral, which points to the need for the region to reinforce its own sources of growth (e.g., structural reforms, investment in infrastructure, and further international trade both within and outside the region). Unfortunately, the region finds itself in a weak fiscal situation with 28 out of 32 countries with an overall fiscal deficit, which implies that a gradual but sustained fiscal consolidation will be needed in the years ahead.The report's main focus (Chapter 2) is on the monetary policy dilemma faced by countries in LAC. When a typical commodity-exporter country in LAC is hit by, say, a negative terms of trade shock, real GDP falls, the currency depreciates, and inflation increases. The Central Bank faces the dilemma of (i) increasing policy rates to defend the currency/fight inflation, but at the cost of aggravating the recession or (ii) reducing the policy rate, thus stimulating output, but encouraging further depreciation and inflation. Traditionally, LAC countries have chosen the first option and have thus pursued procyclical monetary policy (i.e., increasing policy rates in bad times). Recently, however, many countries have been able to switch and become countercyclical (i.e., reducing policy rates in bad times), which enables them to prop up the economy in recessionary times (which is particularly important when lack of fiscal space precludes countercyclical fiscal policy).

Elasticity --- Growth --- Household Income Inequality --- Inequality --- Labor Force Participation --- Labor Income Inequality --- Slowdown --- Terms Of Trade --- Unemployment --- Latin America

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Luego de un pobre crecimiento de 0,7% en el afio 2018. la region de America Latina y el Caribe crecera auna tasa levemente mayor en el 2019 (0.9%) ya una tasa mucho mas solida en el 2020 (2.1%). La regiondebera hacer frente a desafios tanto internos como externos durante el 2019. En el frente interno. larecesion en Argentina. una recuperacion mas lenta de lo esperado en Brasil, la desaceleracion en Mexico. yla crisis en Venezuela son las principales preocupaciones. En el frente externo, la fuerte cafda en lasentradas netas de capital a la region desde principios del 2018 y la normalizacion de la polftica monetariaen los Estados Unidos representan las mayores amenazas. Ademas, el reciente aumento de la pobreza enBrasil como resultado de la recesion sugiere gue el ciclo economico puede tener importantes repercusionessobre la pobreza. Los capftulos centrales de este informe muestran gue el uso de indicadores sociales gueresponden mucho al ciclo economico pueden llevar a conclusiones erroneas en cuanto a las gananciassociales permanentes en la region.

Elasticity --- Growth --- Household Income Inequality --- Inequality --- Labor Force Participation --- Labor Income Inequality --- Slowdown --- Spanish Translation --- Terms of Trade --- Unemployment --- Latin America