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Impacts of the Indonesian Economic Crisis: Price Changes and the Poor

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  • James Levinsohn
  • Steven Berry
  • Jed Friedman

Abstract

The recent financial crisis in Indonesia has resulted in dramatic price increases. Using very recent data, we investigate whether these price increases have impacted the cost-of-living of poor households in a disproportionately harsh way. We find that the poor have indeed been hit hardest. Just how hard the poor have been hit, though, depends crucially on where the household lives, whether the household is in a rural or urban area, and just how the cost-of-living index is computed. What is clear is that the notion that the very poor are so poor as to be insulated from international shocks is simply wrong. Rather, in the Indonesian case, the very poor appear the most vulnerable.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7194.

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Date of creation: Jun 1999
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Publication status: published as Impacts of the Indonesian Economic Crisis.Price Changes and the Poor , James A. Levinsohn, Steven T. Berry, Jed Friedman. in Managing Currency Crises in Emerging Markets , Dooley and Frankel. 2003
Handle: RePEc:nbr:nberwo:7194

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  1. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, Econometric Society, vol. 60(2), pages 287-322, March.
  2. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, Elsevier, vol. 53(3), pages 367-394, March.
  3. Deaton, A., 1988. "Quality, Quantity, And Spatial Variation Of Price," Papers, World Bank - Living Standards Measurement 30, World Bank - Living Standards Measurement.
  4. Frankenberg, E. & Thomas, D. & Beegle, K., 1999. "The Real Costs of Indonesia's Economic Crisis: Preliminary Findings from the Indonesia Family Life Surveys," Papers, RAND - Labor and Population Program 99-04, RAND - Labor and Population Program.
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