Macroeconomic adjustment and the poor : analytical issues and cross-country evidence
AbstractThe author studies the links between macroeconomic adjustment and poverty. First, he summarizes some of the recent evidence on poverty in the developing world. Second, he reviews the various channels through which macroeconomic policies affect the poor. Third, the author emphasizes the role of the labor market. He develops an analytical framework that captures some of the main features of the urban labor market in developing countries and studies the effects of fiscal adjustment on wages, employment, and poverty. Fourth, he presents cross-country regressions linking various macroeconomic and structural variables to poverty. The author finds that output growth and real exchange rate depreciations tend to lower poverty, while illiteracy, income inequality, and macroeconomic volatility tend to increase poverty. In addition, the impact of growth on poverty appears to be asymmetric, and to result from a significant relationship between episodes of increasing poverty and negative growth rates.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2788.
Date of creation: 28 Feb 2002
Date of revision:
Labor Policies; Economic Theory&Research; Services&Transfers to Poor; Environmental Economics&Policies; Economic Conditions and Volatility; Environmental Economics&Policies; Achieving Shared Growth; Economic Theory&Research; Inequality; Poverty Assessment;
Other versions of this item:
- Pierre-Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross-Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18, pages 351-408, 07.
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