Concern is growing regarding the poverty impacts of trade liberalization. The strong general equilibrium effects of trade liberalization can only be properly analysed in a CGE model. However, the aggregate nature of CGE models is not suited to detailed poverty analysis. We bridge this gap by constructing a CGE model that explicitly models all households from a nationally representative household survey. We find complex income and consumption effects that would be missed in standard CGE models. Urban poverty falls and rural poverty increases as initial tariffs were highest for agriculture. Impacts increase with income level, resulting in rising income inequality.
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Find related papers by JEL classification: D33 - Microeconomics - - Distribution - - - Factor Income Distribution D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models E27 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F14 - International Economics - - Trade - - - Country and Industry Studies of Trade I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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