Sandra Lizarazo Ruiz's Books

Macroeconomic and Distributional Effects of Personal Income Tax Reforms

A Heterogenous Agent Model Approach for the U.S

By: Mrs.Sandra V Lizarazo Ruiz,Adrian Peralta-Alva,Mr.Damien Puy

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Macroeconomic and Distributional Effects of Personal Income Tax Reforms

A Heterogenous Agent Model Approach for the U.S

By: Mrs.Sandra V Lizarazo Ruiz,Adrian Peralta-Alva,Mr.Damien Puy

This paper assesses the macroeconomic and distributional impact of personal income tax (PIT) reforms in the U.S. drawing on a multi-sector heterogenous agents model in which consumers have non-homothetic preferences and sectors differ in terms of their relative labor and skill intensity. The model is calibrated to key characteristics of the US economy. We find that (i) PIT cuts stimulate growth but the supply side effects are never large enough to offset the revenue loss from lower marginal tax rates; (ii) PIT cuts do “trickle-down” the income distribution: tax cuts stimulate demand for non-tradable services which raise the wages and employment prospects of low-skilled workers even if the tax cut is not directly incident on them; (iii) A revenue neutral tax plan that reduces PIT for middle-income groups, raises the consumption tax, and expands the Earned Income Tax Credit can have modestly positive effects on growth while reducing income polarization; (iv) The growth effects from lower income taxes are concentrated in non-tradable service sectors although the increased demand for tradable goods generate positive spillovers to other countries; (v) Tax cuts targeted to higher income groups have a stronger growth impact than tax cuts for middle income households but significantly worsen income polarization, even after taking into account trickle-down effects and an expansion of the Earned Income Tax Credit.

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International Monetary Fund

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ISBN 10

1484318226

ISBN 13

9781484318225

Macro-Structural Policies and Income Inequality in Low-Income Developing Countries

By: Ms.Stefania Fabrizio,Davide Furceri,Mr.Rodrigo Garcia-Verdu,Bin Grace Li,Mrs.Sandra V Lizarazo Ruiz,Ms.Marina Mendes Tavares,Mr.Futoshi Narita,Adrian Peralta-Alva

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Macro-Structural Policies and Income Inequality in Low-Income Developing Countries

By: Ms.Stefania Fabrizio,Davide Furceri,Mr.Rodrigo Garcia-Verdu,Bin Grace Li,Mrs.Sandra V Lizarazo Ruiz,Ms.Marina Mendes Tavares,Mr.Futoshi Narita,Adrian Peralta-Alva

Despite sustained economic growth and rapid poverty reductions, income inequality remains stubbornly high in many low-income developing countries. This pattern is a concern as high levels of inequality can impair the sustainability of growth and macroeconomic stability, thereby also limiting countries’ ability to reach the Sustainable Development Goals. This underscores the importance of understanding how policies aimed at boosting economic growth affect income inequality. Using empirical and modeling techniques, the note confirms that macro-structural policies aimed at raising growth payoffs in low-income developing countries can have important distributional consequences, with the impact dependent on both the design of reforms and on country-specific economic characteristics. While there is no one-size-fits-all recipe, the note explores how governments can address adverse distributional consequences of reforms by designing reform packages to make pro-growth policies also more inclusive.

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International Monetary Fund

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ISBN 10

1475570457

ISBN 13

9781475570458

The State as Financier of Last Resort

By: Bryn Battersby,Mr. Raphael A Espinoza,Jason Harris,Mr. Gee Hee Hong,Mrs. Sandra V Lizarazo Ruiz,Mr. Paolo Mauro,Amanda Sayegh

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The State as Financier of Last Resort

By: Bryn Battersby,Mr. Raphael A Espinoza,Jason Harris,Mr. Gee Hee Hong,Mrs. Sandra V Lizarazo Ruiz,Mr. Paolo Mauro,Amanda Sayegh

During the COVID-19 pandemic and global financial crisis, governments swiftly served as financiers of last resort through large financial support measures (FSMs) such as loan and guarantee programs and equity injections in firms. This Staff Discussion Note argues that such FSMs prevented bankruptcies and attenuated the recession by increasing firms’ liquidity, reducing risk premiums, and boosting confidence. But FSMs also carry large and long-lasting fiscal costs and risks. The note presents recommendations for managing the legacies of the COVID-19 programs and preparing for future crises. Ideally, FSMs should be assessed and included in budget plans, though a balance needs to be struck between speed and scrutiny.

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International Monetary Fund

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ISBN 13

9798400220692

Commodity Cycles, Inequality, and Poverty in Latin America

By: Mr. Ravi Balakrishnan,Sandra Lizarazo,Marika Santoro,Mr. Frederik G Toscani,Mr. Mauricio Vargas

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Commodity Cycles, Inequality, and Poverty in Latin America

By: Mr. Ravi Balakrishnan,Sandra Lizarazo,Marika Santoro,Mr. Frederik G Toscani,Mr. Mauricio Vargas

Over the past decades, inequality has risen not just in advanced economies but also in many emerging market and developing economies, becoming one of the key global policy challenges. And throughout the 20th century, Latin America was associated with some of the world’s highest levels of inequality. Yet something interesting happened in the first decade and a half of the 21st century. Latin America was the only region in the World to have experienced significant declines in inequality in that period. Poverty also fell in Latin America, although this was replicated in other regions, and Latin America started from a relatively low base. Starting around 2014, however, and even before the COVID-19 pandemic hit, poverty and inequality gains had already slowed in Latin America and, in some cases, gone into reverse. And the COVID-19 shock, which is still playing out, is likely to dramatically worsen short-term poverty and inequality dynamics. Against this background, this departmental paper investigates the link between commodity prices, and poverty and inequality developments in Latin America.

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