Kunawotor, M.E.2024-04-302024-04-302022-12http://ugspace.ug.edu.gh:8080/handle/123456789/41776PhD. FinanceThis study is an essay on fiscal policy, monetary policy, climate change and income inequality in Africa. The study covers 52 African countries over the period 1990 – 2017. The aim of the first empirical paper is to investigate the effects of temperature change and extreme weather events on fiscal balance in Africa and their implications for fiscal policy formulation. It also investigates the extent to which institutions and adaptive capacity moderate the impacts of extreme weather events and temperature change on fiscal balance. This paper uses the System Generalized Method of Moments, Fixed Effects and Random Effects estimation strategies. The results show that temperature change anomaly which implies a warmer climate in a meteorological year worsens fiscal balance in Africa. The findings also reveal that weather-related events may have a significant negative impact on fiscal balance, if the damage caused is large and consequential. Furthermore, African countries that have relatively strong institutions and adaptive capacities tend to moderate the impact of temperature change anomaly and extreme weather events on fiscal balance. The policy implications of this paper is that the frequent incidence of climatic disruptions and extreme weather events which are considered external shocks, may make the fiscal consolidation efforts and debt sustainability measures of some African governments a little more difficult. The second empirical paper examines the direct effect of extreme weather events on headline inflation and food price inflation. It further investigates if agricultural production empirically serves as a conduit through which extreme weather events impact inflation. This paper uses a two-step system Generalized Method of Moments estimation technique with robust standard errors and Panel VECM and finds that weather-related events may need to occur on a large scale or be extreme to cause a significant price hike in Africa. There is also a bi-directional causality between inflation and extreme weather events in the long run. It also finds that the incidence of droughts and floods leads to a rise in food price inflation. Furthermore, the results reveal that agricultural production serves as a perfect mediator through which extreme weather events affect headline inflation. The policy implication of this paper is that monetary policy authorities may need to consider the implications of supply shocks caused by extreme weather events on general price levels. Also, anchoring inflation expectations should be a drive of policy makers as both headline inflation and food inflation appear quite persistent in Africa. The third empirical paper investigates the effects of weather events and the various types, on income inequality in Africa. It also investigates the impacts that institutions and adaptive capacity play in moderating the impact of weather events on income inequality. Furthermore, it investigates if agricultural productivity mediates the impacts that weather events has on income inequality. The findings using the difference Generalized Method of Moments estimator reveal a non-monotonic U-shape relationship between weather events and income inequality. The result using a simultaneous quantile regression approach shows that weather events increase income inequality at the 10th, 25th, 50th and 75th percent quantiles. In terms of the weather events types, the paper also finds a non-monotonic U-shape relationship between flood and income inequality. Furthermore, institutions tend to moderate the impacts weather events has on income inequality. The results however, shows that there is no statistically significant mediating role of agricultural productivity on the weather events and income inequality nexus. Again, the result appears statistically insignificant on the moderating role adaptive capacity plays in the weather – income inequality nexus. The policy implication is that income inequality concerns should not be ignored in the global climate change discussions. Also, African countries need to strengthen their institutions and adaptive capacities as they remain very weak in the continent. The fourth and final empirical paper examines the distributional effects of both fiscal and monetary policies in Africa. This paper deploys the two-step dynamic system GMM, the simultaneous quantile regression technique and Panel VAR and also uses variants of fiscal and monetary indicators including fiscal redistribution. The results show that fiscal redistribution has been quite effective in Africa as reflected in the role played by income taxes and transfers in reducing Gini coefficients albeit to a relatively little extent. The result shows that direct tax is progressive and a potent tool in redistributing income in favour of the have-nots while indirect tax unsurprisingly is regressive and income un-equalizing. Similarly, the paper finds property taxes to have income un-equalizing effects in Africa. The results of the expenditure indicators reveal that government spending on basic and primary education narrows net income inequality while government spending on secondary and tertiary education rather widens net income inequality. Also, the result show that contractionary monetary policy has unintended distributional effects in Africa. The policy implication of this paper is that African governments need to broaden their tax net, increase the share of direct tax including property tax in the tax net and spend more on basic education to improve income distribution in Africa.enFiscal & Monetary PoliciesClimate ChangeIncome InequalityThesis