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Macroeconomic adjustment and the poor : analytical issues and cross-country evidence

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  • Agenor, Pierre-Richard

Abstract

The 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.

Suggested Citation

  • Agenor, Pierre-Richard, 2002. "Macroeconomic adjustment and the poor : analytical issues and cross-country evidence," Policy Research Working Paper Series 2788, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2788
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Patrick GUILLAUMONT & Catherine KORACHAIS & Julie SUBERVIE, 2006. "How Macroeconomic Instability Lowers Child Survival," Working Papers 200639, CERDI.
    2. Vatcharin Sirimaneetham, 2006. "Explaining policy volatility in developing countries," Bristol Economics Discussion Papers 06/583, Department of Economics, University of Bristol, UK.
    3. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," CEDI Discussion Paper Series 06-12, Centre for Economic Development and Institutions(CEDI), Brunel University.
    4. Rolf Maier, 2005. "External Debt and Pro-Poor Growth," Macroeconomics 0504031, EconWPA.
    5. Claessens, Stijn, 2005. "Taking stock of risk management techniques for sovereigns," Policy Research Working Paper Series 3570, The World Bank.
    6. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, vol. 86(2), pages 277-295, June.
    7. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute for the Study of Labor (IZA).
    8. Eswar S. Prasad & Kenneth Rogoff & Shang-Jin Wei & M. Ayhan Kose, 2007. "Financial Globalization, Growth and Volatility in Developing Countries," NBER Chapters,in: Globalization and Poverty, pages 457-516 National Bureau of Economic Research, Inc.
    9. John Anyanwu, 2013. "Working Paper 181 - Determining the Correlates of Poverty for Inclusive Growth in Africa," Working Paper Series 979, African Development Bank.
    10. Gustav A. Horn & Fabian Lindner & Torsten Niechoj, 2011. "Schuldenschnitt für Griechenland - ein gefährlicher Irrweg für den Euroraum," IMK Report 63-2011, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    11. Luis Carvalho & Aurora A.C. Teixeira, 2011. "Where are the poor in International Economics?," FEP Working Papers 425, Universidade do Porto, Faculdade de Economia do Porto.
    12. Pierre-Richard Agénor, 2005. "Unemployment-Poverty Tradeoffs," Central Banking, Analysis, and Economic Policies Book Series,in: Jorge Restrepo & Andrea Tokman R. & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edi (ed.), Labor Markets and Institutions, edition 1, volume 8, chapter 5, pages 115-165 Central Bank of Chile.
    13. Gul, Adnan, 2008. "Pakistan’s Public Debt: The shocks and aftershocks," MPRA Paper 11427, University Library of Munich, Germany.
    14. Hong-Ghi Min, 2002. "Inequality, the price of nontradables, and the real exchange rate : theory and cross-country evidence," Policy Research Working Paper Series 2758, The World Bank.
    15. Hyun H. Son & Nanak Kakwani, 2006. "Global Estimates of Pro-Poor Growth," Working Papers 31, International Policy Centre for Inclusive Growth.
    16. Christian A. Emini & Hippolyte Fofack, 2004. "A financial social accounting matrix for the integrated macroeconomic model for poverty analysis : application to Cameroon with a fixed-price multiplier analysis," Policy Research Working Paper Series 3219, The World Bank.
    17. Katsushi S. Imai & Gordon Abekah-Nkrumah & Purnima Purohit, 2014. "Is Rural Contribution to Aggregate Poverty Reduction Substantial? New Evidence," Brooks World Poverty Institute Working Paper Series 20814, BWPI, The University of Manchester.
    18. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    19. César Calderón and Eduardo Levy Yeyati, 2007. "Zooming in: From Aggregate Volatility to Income Distribution," Business School Working Papers 2007-03, Universidad Torcuato Di Tella.
    20. Jean-Paul MINVIELLE, 2007. "Polysémie des approches monétaires de la pauvreté : le dilemme rural-urbain au Sénégal," Discussion Papers (REL - Recherches Economiques de Louvain) 2007024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    21. Agenor, Pierre-Richard, 2005. "Fiscal adjustment and labor market dynamics in an open economy," Journal of Development Economics, Elsevier, vol. 76(1), pages 97-125, February.
    22. Arnim Langer and Frances Stewart (QEH), "undated". "Macro Adjustment Policies and Horizontal Inequalities," QEH Working Papers qehwps158, Queen Elizabeth House, University of Oxford.

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