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Assessing ex ante the poverty and distributional impact of the global crisis in a developing country : a micro-simulation approach with application to Bangladesh


  • Habib, Bilal
  • Narayan, Ambar
  • Olivieri, Sergio
  • Sanchez-Paramo, Carolina


Measuring the poverty and distributional impact of the global crisis for developing countries is not easy, given the multiple channels of impact and the limited availability of real-time data. Commonly-used approaches are of limited use in addressing questions like who are being affected by the crisis and by how much, and who are vulnerable to falling into poverty if the crisis deepens? This paper develops a simple micro-simulation method, modifying models from existing economic literature, to measure the poverty and distributional impact of macroeconomic shocks by linking macro projections with pre-crisis household data. The approach is then applied to Bangladesh to assess the potential impact of the slowdown on poverty and income distribution across different groups and regions. A validation exercise using past data from Bangladesh finds that the model generates projections that compare well with actual estimates from household data. The results can inform the design of crisis monitoring tools and policies in Bangladesh, and also illustrate the kind of analysis that is possible in other developing countries with similar data availability.

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  • Habib, Bilal & Narayan, Ambar & Olivieri, Sergio & Sanchez-Paramo, Carolina, 2010. "Assessing ex ante the poverty and distributional impact of the global crisis in a developing country : a micro-simulation approach with application to Bangladesh," Policy Research Working Paper Series 5238, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5238

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    1. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
    2. Marco Terrones & Enrique G. Mendoza, 2008. "An Anatomy of Credit Booms; Evidence From Macro Aggregates and Micro Data," IMF Working Papers 08/226, International Monetary Fund.
    3. Marius Brulhart & Michael Thorpe, 2000. "Intra-industry trade and adjustment in Malaysia: puzzling evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 7(11), pages 729-733.
    4. Reinhart, Carmen M. & Rogoff, Kenneth S., 2013. "Banking crises: An equal opportunity menace," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4557-4573.
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    Cited by:

    1. Ajwad, Mohamed Ihsan & Haimovich, Francisco & Azam, Mehtabul, 2012. "Simulating the impact of the 2009 financial crisis on welfare in Latvia," Policy Research Working Paper Series 5960, The World Bank.
    2. Delphine Boutin, 2011. "D’une crise à l’autre : Mesurer l’impact des prix alimentaires sur la pauvreté," Larefi Working Papers 1106, Larefi, Université Bordeaux 4.
    3. Delphine Boutin, 2011. "D'une crise à l'autre : mesurer l'impact des prix alimentaires sur la pauvreté," Working Papers hal-00637608, HAL.
    4. Jekaterina Navicke & Olga Rastrigina & Holly Sutherland, 2014. "Nowcasting Indicators of Poverty Risk in the European Union: A Microsimulation Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(1), pages 101-119, October.
    5. Cojocaru, Alexandru & Olivieri, Sergio, 2014. "Updating the poverty estimates in Serbia in the absence of micro data : a microsimulation approach," Policy Research Working Paper Series 6889, The World Bank.
    6. Oscar Barriga Cabanillas & Maria Ana Lugo & Carlos Rodríguez-Castelan & Hannah Nielsen & Maria Pia Zanetti, 2015. "Is Uruguay More Resilient This Time? Distributional Impacts of a Crisis Similar to the 2001–02 Argentine Crisis," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(4), pages 64-90, June.
    7. Alma Kudebayeva, 2012. "Effects of Crisis on Income and Poverty: The Case of Kazakhstan," wiiw Balkan Observatory Working Papers 102, The Vienna Institute for International Economic Studies, wiiw.
    8. Cororaton, Caesar B. & Knight, David S., 2014. "The impact of exogenous shocks on households in the Pacific : a micro-simulation analysis," Policy Research Working Paper Series 7046, The World Bank.
    9. repec:sgm:jbfeuw:v:2:y:2015:i:4:p:27 is not listed on IDEAS

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    Rural Poverty Reduction; Regional Economic Development; Achieving Shared Growth; Economic Theory&Research;

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