Commodity prices have risen sharply since 2006. This may benefit developing countries specialized on primary exports, but poverty may increase. Uruguay is a net exporter of primary products and a net importer of oil. With the aim of analyzing the impact of soaring commodity prices and policy options, we apply a CGE model and microsimulations. A rise in food prices has a positive impact on the Uruguayan economy that is partially offset by the increase in oil prices. Even when poorest households’ income rises, their welfare falls because their consumption basket becomes more expensive. Poverty falls but extreme poverty increases. A policy of transfers to the poorest households seems to be the most efficient policy option to compensate poor households
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 3209.
Length: 27 pages
Date of creation: Dec 2009
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International Commodity Prices; Poverty Policies; Labor Issues; International Trade; Computable General Equilibrium Model.;
Find related papers by JEL classification:
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
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Documentos de Trabajo (working papers)
1205, Department of Economics - dECON.
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