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GTAP Resource #2041

"Assessment of Poverty Impacts of Trade Liberalization by Integration of Household Analysis in CGE Models: Possibilities and Perspectives."
by Gonzalez–Mellado, Aida

Abstract: In recent years, poverty reduction has become a topic of increasing concern in trade negotiations lead mainly by the World Trade Organization (WTO) and the World Bank. The linkages between trade liberalization and poverty analysis are a growing economic research area, which is reflected in the broad diversity of approaches developed for this study.
Generally, the effect of liberalization on price changes is considered an important pathway to understanding how liberalization affects the poor. One of the methods currently applied for measuring the impact of trade liberalization on poverty alleviation is Computable General Equilibrium (CGE) modelling coupled with household modelling. CGE modelling simulates the international economic environment that produces the change in national prices, and household modelling assesses the effects of prices changes at the household level.

The theoretical approach of this study aims to describe the household demand system, and the main features which should be considered when analysing the effects of trade liberalization on households applying a CGE model. Current household analysis approaches are reviewed as well.

The empirical approach of this research compares results of simulations for Mexico using first the standard CGE model GTAP (Global Trade Analysis Project) as a price generator in a post-simulation analysis (1), with results obtained from a GTAP Model extension. The extended GTAP model developed in this contribution splits the general household system of GTAP into several different Mexican household types, according to income sources and expenditure behavior.

Keywords: Trade liberalization, developing countries, poverty alleviation, GTAP macro micro analysis.

1. Procedure followed by Alessandro Nicita in Multilateral Trade Liberalization and Mexican Households: The effect of the Doha Round Development Agenda. Working Paper No. 3707. Wold Bank. 2005.

Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Date: 2006
Created: Gonzalez–Mellado, A. (5/1/2006)
Updated: Gonzalez–Mellado, A. (12/15/2006)
Visits: 2,879
No keywords have been specified.

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