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Analyzing Poverty Impact of Trade Liberalization Policies in CGE Models: Theory and Some Policy Experiments in Agricultural and Non-agricultural Sectors in South Asia

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  • Khan, haider

Abstract

The paper uses a dualistic, compact and “generic” (macroeconomic) computable general equilibrium (CGE) model specially constructed for the purpose of investigating the implications of trade liberalization for poverty reduction in South Asia. The model is a stylized representation of economies with large populations including large numbers of both urban and rural poor as in India, Pakistan or Bangladesh. The current “generic” model uses CES production functions and Harris-Todaro type migration model together with representative data to generate economy wide results. It is found that a dualistic production structure with sufficient details on the labor markets and household side can capture some of the effects of trade liberalization on poverty reduction. The model’s general equilibrium results suggest that trade liberalization can complement other specific policy interventions for poverty reduction.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7609.

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Date of creation: Mar 2008
Date of revision: Mar 2008
Handle: RePEc:pra:mprapa:7609

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Keywords: Poverty; Trade Liberalization; Dualism; CGE model; Agriculture Informal; Urban Informal sector;

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Cited by:
  1. John Gilbert & Nilanjan Banik, 2010. "Socioeconomic Impacts of Cross- Border Transport Infrastructure Development in South Asia," Development Economics Working Papers 21803, East Asian Bureau of Economic Research.
  2. John Gilbert, 2011. "Trade reforms under Doha and income distribution in South Asia," STUDIES IN TRADE AND INVESTMENT, in: Trade-led growth: A sound strategy for Asia, chapter 12 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

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