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GTAP Resource #2785

"The Impact of Global and Domestic Trade Liberalization on Poverty and Inequality in Argentina"
by Cicowiez, Martin, Carolina Diaz-Bonilla and Eugenio Diaz-Bonilla

In 2001-2002, Argentina experienced one of the most severe crises in history. Poverty skyrocketed to almost 60 percent and GDP decreased by 10% (on top of the 10% decline of the three previous years). Since then, the country has recorded a strong and rapid recovery, growing at an average 8.5 percent between 2003-2006. Effective macroeconomic management and positive external conditions have played a role in the recovery. Unemployment has fallen, formal sector jobs are growing, and poverty has decreased strongly. Among the Government policies instituted, the imposition of export taxes on agricultural (and non-agricultural) sectors is directly relevant to the current project on the distributional, inequality, and poverty effects of distortions to agricultural incentives. The paper uses a combination of a global economy-wide CGE model (for the simulation of terms-of-trade shocks from rest-of-world policies), a national CGE model for Argentina, and microsimulations. We analyze and compare the effects of removing rest-of-world distortions and own-country tariff and export taxes on Argentina's agricultural products. The link to the microsimulation model analyzes the impact of these various changes on household poverty and inequality. The preliminary results show opposite welfare effects depending on whether import tariff or export taxes are removed, and on whether the liberalization is only global or domestic or both.

Resource Details (Export Citation) GTAP Keywords
Category: 2008 Conference Paper
Status: Published
By/In: Presented at the 11th Annual Conference on Global Economic Analysis, Helsinki, Finland
Date: 2008
Created: Diaz-Bonilla, C. (4/15/2008)
Updated: Batta, G. (5/2/2008)
Visits: 2,129
- Domestic policy analysis
- Economic analysis of poverty
- South America

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