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Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe

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  • Margaret Chitiga
  • Tonia Kandiero
  • Ramos Mabugu

Abstract

The paper uses a micro-simulation computable general equilibrium (CGE) model to study the impact on poverty of trade liberalisation in Zimbabwe. The model incorporates 14006 households derived from the 1995 Poverty Assessment Study Survey (PASS). The novelty of this paper is that it is one among a small group of papers that incorporates individual households in the CGE model as opposed to having representative households, allowing for a comprehensive analysis of poverty. The complete removal of tariffs favours export-oriented sectors and all imports increase. Poverty falls in the economy while inequality hardly changes. The results differ between rural and urban areas.

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Bibliographic Info

Paper provided by PEP-MPIA in its series Working Papers MPIA with number 2005-01.

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Date of creation: 2005
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Handle: RePEc:lvl:mpiacr:2005-01

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Keywords: Computable General Equilibrium; Trade Liberalisation; Micro-simulation; Poverty; Inequality;

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References

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  1. Piggott,John & Whalley,John, 2009. "UK Tax Policy and Applied General Equilibrium Analysis," Cambridge Books, Cambridge University Press, number 9780521104593, April.
  2. Reimer, Jeffrey J., 2002. "Estimating the Poverty Impacts of Trade Liberalization," GTAP Working Papers 1163, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  3. Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Luc Savard, 2004. "Poverty and Inequality Analysis within a CGE Framework: a Comparative Analysis of the Representative Agent and Micro-Simulation Approaches," Cahiers de recherche 0412, CIRPEE.
  5. Ramkishen Rajan & Graham Bird, 2002. "Trade Liberalization and Poverty: Where Do We Stand?," Centre for International Economic Studies Working Papers 2002-30, University of Adelaide, Centre for International Economic Studies.
  6. Davies, Rob & Rattso, Jorn & Torvik, Ragnar, 1994. "The Macroeconomics of Zimbabwe in the 1980s: A CGE-Model Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 3(2), pages 153-98, October.
  7. John Cockburn, 2004. "Trade Liberalisation and Poverty in Nepal A Computable General Equilibrium Micro Simulation Analysis," Development and Comp Systems 0409012, EconWPA.
  8. Bautista, Romeo M. & Lofgren, Hans & Thomas, Marcelle, 1998. "Does trade liberalization enhance income growth and equity in Zimbabwe?: the role of complimentary policies," TMD discussion papers 32, International Food Policy Research Institute (IFPRI).
  9. Rattso, Jorn & Torvik, Ragnar, 1998. "Zimbabwean Trade Liberalisation: Ex Post Evaluation," Cambridge Journal of Economics, Oxford University Press, vol. 22(3), pages 325-46, May.
  10. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  11. Winters, L. Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers 2382, C.E.P.R. Discussion Papers.
  12. Stifel, David C. & Thorbecke, Erik, 2003. "A dual-dual CGE model of an archetype African economy: trade reform, migration and poverty," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 207-235, April.
  13. Cogneau, Denis & Robilliard, Anne-Sophie, 2000. "Growth, distribution and poverty in Madagascar," TMD discussion papers 61, International Food Policy Research Institute (IFPRI).
  14. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  15. Decaluwé, Bernard & Dumont, Jean-Christophe & Savard, Luc, 2000. "Measuring Poverty and Inequality in a Computable General Equilibrium Model," Cahiers de recherche 9926, Université Laval - Département d'économique.
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Cited by:
  1. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 60-71, June.
  2. Kebede, Sindu & Fekadu, Belay & Aredo, Dejene, 2011. "Trade Liberalization and Poverty: A Macro-Micro Analysis in Ethiopia," Proceedings of the German Development Economics Conference, Berlin 2011 44, Verein für Socialpolitik, Research Committee Development Economics.
  3. Chala, Zelalem T. & Norton, George W. & Grant, Jason H., 2010. "Economic Significance of Specific Export Promotion on Poverty Reduction and Inter- Industry Growth of Ethiopia," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61739, Agricultural and Applied Economics Association.
  4. Acharya, Sanjaya & Cohen, Solomon, 2008. "Trade liberalisation and household welfare in Nepal," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1057-1060.
  5. Mahofa, Godfrey, 2007. "Economic Analysis of Factors Affecting Cotton Production In Zimbabwe," Research Theses 134490, Collaborative Masters Program in Agricultural and Applied Economics.

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