International Commodity Prices, Trade and Poverty in Uruguay
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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- Thomas W. Hertel & Jeffrey J. Reimer, 2006.
"Predicting the Poverty Impacts of Trade Reform,"
QA - Rivista dell'Associazione Rossi-Doria,
Associazione Rossi Doria, issue 2, May.
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- Hertel, Thomas W. & Reimer, Jeffrey J., 2004. "Predicting the poverty impacts of trade reform," Policy Research Working Paper Series 3444, The World Bank.
- Maria Inés Terra & Marisa Bucheli & Silvia Laens & Carmen Estrades, 2005. "The effects of increasing openness and integration to the MERCOSUR on the Uruguayan labour market. A CGE modeling analysis," Documentos de Trabajo (working papers) 1205, Department of Economics - dECON.
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