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By Luiz A. Pereira da Silva, Francois Bourguignon

This publication studies suggestions and instruments that may be used to judge the poverty and distributional impression of financial coverage offerings. It describes the main powerful strategies and instruments now available—from the easiest to the main complex—and identifies top practices. The instruments reviewed the following support quantify the trade-offs and outcomes of financial rules that impact nations via a variety of channels. each one bankruptcy addresses a particular overview strategy and its purposes, and loved ones survey information are used for descriptions of monetary welfare distribution. the focal point is at the micro point within the first a part of the ebook, and hyperlinks among macro modeling and the microeconomic distribution of monetary welfare are the point of interest within the final 5 chapters.

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Extra info for The Impact of Economic Policies on Poverty and Income Distribution: Evaluation Techniques and Tools

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Typically, we assume that indirect taxes on goods are shifted entirely to consumers, a standard result if markets are competitive and the taxes apply only to final sales (or value added). This assumption ignores any effect that the taxes may have on firms’ welfare (or rather, the welfare of the firm’s owners) and, more important, any cascading of taxes through the economy’s production structure. For import duties, we usually assume that all prices, including those for domestically produced goods of the same type, rise in proportion to the duty rate.

First, in chapter 11 the household survey data are linked to a macroconsistency accounting framework with a simple representation of the labor market. Second, in chapter 12 the focus is shifted to the distribution and poverty impact on producers and consumers observed in a microeconomic database of changes in prices and quantities produced in a set of related markets under partial equilibrium assumptions. Third, in chapter 13 the micro-macro linkage is done with a simple three-sector general equilibrium model with flexible prices and wages.

This simplicity entails some problems, though. First, the way in which macroeconomic levers produce changes in sectoral income per capita is oversimplified. Second, assumptions about changes in the distribution within sectors are totally arbitrary. For instance, no account is taken of the fact that the structure of factor rewards may change within sectors or that households are differently affected by a change in the structure of consumption prices. Finally, the treatment of the distributional effects of changes in sectoral structures is oversimplified.

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