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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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  • Khan, haider, 2008. "Analyzing Poverty Impact of Trade Liberalization Policies in CGE Models: Theory and Some Policy Experiments in Agricultural and Non-agricultural Sectors in South Asia," MPRA Paper 7609, University Library of Munich, Germany, revised Mar 2008.
    • Handle: RePEc:pra:mprapa:7609
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    2. Gilbert, John & Banik, Nilanjan, 2010. "Socioeconomic Impacts of Cross-Border Transport Infrastructure Development in South Asia," ADBI Working Papers 211, Asian Development Bank Institute.
    3. Emerta Aragie & Hasan Dudu & Emanuele Ferrari & Alfredo Mainar & Scott McDonald & Karen Thierfelder, 2017. "STAGE_DEV. A variant of the STAGE model to analyse developing countries," JRC Research Reports JRC104686, Joint Research Centre.
    4. 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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    More about this item

    Keywords

    Poverty; Trade Liberalization; Dualism; CGE model; Agriculture Informal; Urban Informal sector;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • A10 - General Economics and Teaching - - General Economics - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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