The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches

The importance of distributional issues in policymaking creates a need for empirical tools to assess the social impact of economic shocks and policies. This paper reviews some of the modeling approaches that are currently in use at the World Bank and other international financial institutions. The s...

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Main Author:	Essama-Nssah, B.
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGGREGATE GROWTH AGGREGATE LEVEL AGGREGATE OUTPUT AGRICULTURAL TRADE AGRICULTURE ALTERNATIVE GROWTH PATHS ANNUAL GROWTH ASSESSING POVERTY BASE YEAR BENCHMARK CAPITAL FLOWS CONSUMER PRICE INDEXES CONSUMERS CONSUMPTION DISTRIBUTION CPI CURRENCY UNITS DATA AVAILABILITY DATA SET DATA SETS DEMAND CURVES DEMAND FUNCTIONS DEVELOPING COUNTRIES DEVELOPMENT STRATEGIES DISPOSABLE INCOME DISTRIBUTIONAL ANALYSIS DISTRIBUTIONAL DATA DISTRIBUTIONAL IMPACT DISTRIBUTIONAL IMPLICATIONS ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC SHOCKS ECONOMIC STAGNATION ECONOMIC WELFARE ELASTICITIES EMPLOYMENT EMPLOYMENT STATUS ENDOGENOUS VARIABLES EQUILIBRIUM EXCHANGE RATE EXOGENOUS VARIABLES FACTOR PRICES FINANCIAL INSTITUTIONS FINANCIAL SECTOR FIXED PRICES GDP GDP DEFLATOR GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GINI INDEX GROSS DOMESTIC PRODUCT GROWTH COMPONENT GROWTH MODELS GROWTH RATE GROWTH RATES HEADCOUNT POVERTY HOUSEHOLD BEHAVIOR HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE IMPORTS INCOME INCOME DISTRIBUTION INCOME GENERATION INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SOURCES INEQUALITY COMPONENT INEQUALITY CONSTANT INEQUALITY MEASURES INTERMEDIATE GOODS LABOR MARKET LAND OWNERSHIP LIQUIDITY LIVING STANDARDS LOCAL CURRENCY LORENZ CURVE MACROECONOMIC ANALYSIS MACROECONOMIC FRAMEWORK MACROECONOMIC MODELS MACROECONOMIC SHOCKS MARGINAL UTILITY MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MINIMUM WAGE MONETARY POLICY MONEY SUPPLY NATIONAL ACCOUNTS NATIONAL AVERAGE NATIONAL LEVEL NATIONAL POVERTY OBSERVED INCREASE OIL OPEN ECONOMIES OPTIMIZATION OPTIMIZING BEHAVIOR OUTPUT GROWTH PER CAPITA CONSUMPTION PER CAPITA INCOME POLICY ANALYSIS POLICY CHOICES POLICY IMPACT POLICY INSTRUMENTS POLICY ISSUES POLICY MAKING POLICY OPTIONS POLICY REFORM POLICY REFORMS POLICY RESEARCH POLICY RESPONSE POLITICAL FACTORS POPULATION GROWTH POPULATION GROWTH RATES POPULATION SHARE POVERTY ANALYSIS POVERTY ASSESSMENT POVERTY CHANGES POVERTY COMPARISONS POVERTY DYNAMICS POVERTY GAP POVERTY HEADCOUNT POVERTY INCIDENCE POVERTY INDEXES POVERTY INDICATOR POVERTY ISSUES POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY REDUCTION STRATEGY PRICE CHANGES PRODUCERS PROFIT FUNCTIONS PROPORTIONATE CHANGES PUBLIC EXPENDITURE PUBLIC POLICY PURCHASING POWER PURCHASING POWER PARITY RAPID GROWTH REAL GROWTH REDUCED POVERTY REGIONAL DISPARITIES REGRESSION ANALYSIS REPRESENTATIVE SAMPLE RESOURCE ALLOCATION RESOURCE ENDOWMENTS RURAL AREAS RURAL POVERTY SAVINGS SENSITIVITY ANALYSIS SIGNIFICANT REDUCTION SOCIAL INDICATORS SOCIAL POLICIES SQUARED POVERTY GAP TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRADE SHOCKS URBAN AREAS URBAN HOUSEHOLDS UTILITY FUNCTION WAGE INCOME WAGE RATES WAGES WORLD TRADE ORGANIZATION
Online Access:	http://documents.worldbank.org/curated/en/2005/08/6213800/poverty-distributional-impact-macroeconomic-shocks-policies-review-modeling-approaches http://hdl.handle.net/10986/8614

id	okr-10986-8614
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repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGGREGATE GROWTH AGGREGATE LEVEL AGGREGATE OUTPUT AGRICULTURAL TRADE AGRICULTURE ALTERNATIVE GROWTH PATHS ANNUAL GROWTH ASSESSING POVERTY BASE YEAR BENCHMARK CAPITAL FLOWS CONSUMER PRICE INDEXES CONSUMERS CONSUMPTION DISTRIBUTION CPI CURRENCY UNITS DATA AVAILABILITY DATA SET DATA SETS DEMAND CURVES DEMAND FUNCTIONS DEVELOPING COUNTRIES DEVELOPMENT STRATEGIES DISPOSABLE INCOME DISTRIBUTIONAL ANALYSIS DISTRIBUTIONAL DATA DISTRIBUTIONAL IMPACT DISTRIBUTIONAL IMPLICATIONS ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC SHOCKS ECONOMIC STAGNATION ECONOMIC WELFARE ELASTICITIES EMPLOYMENT EMPLOYMENT STATUS ENDOGENOUS VARIABLES EQUILIBRIUM EXCHANGE RATE EXOGENOUS VARIABLES FACTOR PRICES FINANCIAL INSTITUTIONS FINANCIAL SECTOR FIXED PRICES GDP GDP DEFLATOR GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GINI INDEX GROSS DOMESTIC PRODUCT GROWTH COMPONENT GROWTH MODELS GROWTH RATE GROWTH RATES HEADCOUNT POVERTY HOUSEHOLD BEHAVIOR HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE IMPORTS INCOME INCOME DISTRIBUTION INCOME GENERATION INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SOURCES INEQUALITY COMPONENT INEQUALITY CONSTANT INEQUALITY MEASURES INTERMEDIATE GOODS LABOR MARKET LAND OWNERSHIP LIQUIDITY LIVING STANDARDS LOCAL CURRENCY LORENZ CURVE MACROECONOMIC ANALYSIS MACROECONOMIC FRAMEWORK MACROECONOMIC MODELS MACROECONOMIC SHOCKS MARGINAL UTILITY MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MINIMUM WAGE MONETARY POLICY MONEY SUPPLY NATIONAL ACCOUNTS NATIONAL AVERAGE NATIONAL LEVEL NATIONAL POVERTY OBSERVED INCREASE OIL OPEN ECONOMIES OPTIMIZATION OPTIMIZING BEHAVIOR OUTPUT GROWTH PER CAPITA CONSUMPTION PER CAPITA INCOME POLICY ANALYSIS POLICY CHOICES POLICY IMPACT POLICY INSTRUMENTS POLICY ISSUES POLICY MAKING POLICY OPTIONS POLICY REFORM POLICY REFORMS POLICY RESEARCH POLICY RESPONSE POLITICAL FACTORS POPULATION GROWTH POPULATION GROWTH RATES POPULATION SHARE POVERTY ANALYSIS POVERTY ASSESSMENT POVERTY CHANGES POVERTY COMPARISONS POVERTY DYNAMICS POVERTY GAP POVERTY HEADCOUNT POVERTY INCIDENCE POVERTY INDEXES POVERTY INDICATOR POVERTY ISSUES POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY REDUCTION STRATEGY PRICE CHANGES PRODUCERS PROFIT FUNCTIONS PROPORTIONATE CHANGES PUBLIC EXPENDITURE PUBLIC POLICY PURCHASING POWER PURCHASING POWER PARITY RAPID GROWTH REAL GROWTH REDUCED POVERTY REGIONAL DISPARITIES REGRESSION ANALYSIS REPRESENTATIVE SAMPLE RESOURCE ALLOCATION RESOURCE ENDOWMENTS RURAL AREAS RURAL POVERTY SAVINGS SENSITIVITY ANALYSIS SIGNIFICANT REDUCTION SOCIAL INDICATORS SOCIAL POLICIES SQUARED POVERTY GAP TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRADE SHOCKS URBAN AREAS URBAN HOUSEHOLDS UTILITY FUNCTION WAGE INCOME WAGE RATES WAGES WORLD TRADE ORGANIZATION
spellingShingle	AGGREGATE GROWTH AGGREGATE LEVEL AGGREGATE OUTPUT AGRICULTURAL TRADE AGRICULTURE ALTERNATIVE GROWTH PATHS ANNUAL GROWTH ASSESSING POVERTY BASE YEAR BENCHMARK CAPITAL FLOWS CONSUMER PRICE INDEXES CONSUMERS CONSUMPTION DISTRIBUTION CPI CURRENCY UNITS DATA AVAILABILITY DATA SET DATA SETS DEMAND CURVES DEMAND FUNCTIONS DEVELOPING COUNTRIES DEVELOPMENT STRATEGIES DISPOSABLE INCOME DISTRIBUTIONAL ANALYSIS DISTRIBUTIONAL DATA DISTRIBUTIONAL IMPACT DISTRIBUTIONAL IMPLICATIONS ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC SHOCKS ECONOMIC STAGNATION ECONOMIC WELFARE ELASTICITIES EMPLOYMENT EMPLOYMENT STATUS ENDOGENOUS VARIABLES EQUILIBRIUM EXCHANGE RATE EXOGENOUS VARIABLES FACTOR PRICES FINANCIAL INSTITUTIONS FINANCIAL SECTOR FIXED PRICES GDP GDP DEFLATOR GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GINI INDEX GROSS DOMESTIC PRODUCT GROWTH COMPONENT GROWTH MODELS GROWTH RATE GROWTH RATES HEADCOUNT POVERTY HOUSEHOLD BEHAVIOR HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE IMPORTS INCOME INCOME DISTRIBUTION INCOME GENERATION INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SOURCES INEQUALITY COMPONENT INEQUALITY CONSTANT INEQUALITY MEASURES INTERMEDIATE GOODS LABOR MARKET LAND OWNERSHIP LIQUIDITY LIVING STANDARDS LOCAL CURRENCY LORENZ CURVE MACROECONOMIC ANALYSIS MACROECONOMIC FRAMEWORK MACROECONOMIC MODELS MACROECONOMIC SHOCKS MARGINAL UTILITY MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MINIMUM WAGE MONETARY POLICY MONEY SUPPLY NATIONAL ACCOUNTS NATIONAL AVERAGE NATIONAL LEVEL NATIONAL POVERTY OBSERVED INCREASE OIL OPEN ECONOMIES OPTIMIZATION OPTIMIZING BEHAVIOR OUTPUT GROWTH PER CAPITA CONSUMPTION PER CAPITA INCOME POLICY ANALYSIS POLICY CHOICES POLICY IMPACT POLICY INSTRUMENTS POLICY ISSUES POLICY MAKING POLICY OPTIONS POLICY REFORM POLICY REFORMS POLICY RESEARCH POLICY RESPONSE POLITICAL FACTORS POPULATION GROWTH POPULATION GROWTH RATES POPULATION SHARE POVERTY ANALYSIS POVERTY ASSESSMENT POVERTY CHANGES POVERTY COMPARISONS POVERTY DYNAMICS POVERTY GAP POVERTY HEADCOUNT POVERTY INCIDENCE POVERTY INDEXES POVERTY INDICATOR POVERTY ISSUES POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY REDUCTION STRATEGY PRICE CHANGES PRODUCERS PROFIT FUNCTIONS PROPORTIONATE CHANGES PUBLIC EXPENDITURE PUBLIC POLICY PURCHASING POWER PURCHASING POWER PARITY RAPID GROWTH REAL GROWTH REDUCED POVERTY REGIONAL DISPARITIES REGRESSION ANALYSIS REPRESENTATIVE SAMPLE RESOURCE ALLOCATION RESOURCE ENDOWMENTS RURAL AREAS RURAL POVERTY SAVINGS SENSITIVITY ANALYSIS SIGNIFICANT REDUCTION SOCIAL INDICATORS SOCIAL POLICIES SQUARED POVERTY GAP TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRADE SHOCKS URBAN AREAS URBAN HOUSEHOLDS UTILITY FUNCTION WAGE INCOME WAGE RATES WAGES WORLD TRADE ORGANIZATION Essama-Nssah, B. The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches
relation	Policy Research Working Paper; No. 3682
description	The importance of distributional issues in policymaking creates a need for empirical tools to assess the social impact of economic shocks and policies. This paper reviews some of the modeling approaches that are currently in use at the World Bank and other international financial institutions. The specification of these models is dictated by the issues at stake, the knowledge about the nature of the process involved, and the availability and reliability of relevant data. Furthermore, shocks and policies have macroeconomic, structural, and distributional implications. This creates interdependence between such policy issues. Finally, the distributional impact of shocks and policies hinges on the heterogeneity of socioeconomic agents with respect to endowments and behavior. In the end, each modeling approach should be judged on how well it handles the interdependence between policy issues and the heterogeneity of the stakeholders, given other constraints.
format	Publications & Research :: Policy Research Working Paper
author	Essama-Nssah, B.
author_facet	Essama-Nssah, B.
author_sort	Essama-Nssah, B.
title	The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches
title_short	The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches
title_full	The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches
title_fullStr	The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches
title_full_unstemmed	The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches
title_sort	poverty and distributional impact of macroeconomic shocks and policies : a review of modeling approaches
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/08/6213800/poverty-distributional-impact-macroeconomic-shocks-policies-review-modeling-approaches http://hdl.handle.net/10986/8614
_version_	1764407649628061696
spelling	okr-10986-86142021-04-23T14:02:43Z The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches Essama-Nssah, B. AGGREGATE GROWTH AGGREGATE LEVEL AGGREGATE OUTPUT AGRICULTURAL TRADE AGRICULTURE ALTERNATIVE GROWTH PATHS ANNUAL GROWTH ASSESSING POVERTY BASE YEAR BENCHMARK CAPITAL FLOWS CONSUMER PRICE INDEXES CONSUMERS CONSUMPTION DISTRIBUTION CPI CURRENCY UNITS DATA AVAILABILITY DATA SET DATA SETS DEMAND CURVES DEMAND FUNCTIONS DEVELOPING COUNTRIES DEVELOPMENT STRATEGIES DISPOSABLE INCOME DISTRIBUTIONAL ANALYSIS DISTRIBUTIONAL DATA DISTRIBUTIONAL IMPACT DISTRIBUTIONAL IMPLICATIONS ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC SHOCKS ECONOMIC STAGNATION ECONOMIC WELFARE ELASTICITIES EMPLOYMENT EMPLOYMENT STATUS ENDOGENOUS VARIABLES EQUILIBRIUM EXCHANGE RATE EXOGENOUS VARIABLES FACTOR PRICES FINANCIAL INSTITUTIONS FINANCIAL SECTOR FIXED PRICES GDP GDP DEFLATOR GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GINI INDEX GROSS DOMESTIC PRODUCT GROWTH COMPONENT GROWTH MODELS GROWTH RATE GROWTH RATES HEADCOUNT POVERTY HOUSEHOLD BEHAVIOR HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE IMPORTS INCOME INCOME DISTRIBUTION INCOME GENERATION INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SOURCES INEQUALITY COMPONENT INEQUALITY CONSTANT INEQUALITY MEASURES INTERMEDIATE GOODS LABOR MARKET LAND OWNERSHIP LIQUIDITY LIVING STANDARDS LOCAL CURRENCY LORENZ CURVE MACROECONOMIC ANALYSIS MACROECONOMIC FRAMEWORK MACROECONOMIC MODELS MACROECONOMIC SHOCKS MARGINAL UTILITY MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MINIMUM WAGE MONETARY POLICY MONEY SUPPLY NATIONAL ACCOUNTS NATIONAL AVERAGE NATIONAL LEVEL NATIONAL POVERTY OBSERVED INCREASE OIL OPEN ECONOMIES OPTIMIZATION OPTIMIZING BEHAVIOR OUTPUT GROWTH PER CAPITA CONSUMPTION PER CAPITA INCOME POLICY ANALYSIS POLICY CHOICES POLICY IMPACT POLICY INSTRUMENTS POLICY ISSUES POLICY MAKING POLICY OPTIONS POLICY REFORM POLICY REFORMS POLICY RESEARCH POLICY RESPONSE POLITICAL FACTORS POPULATION GROWTH POPULATION GROWTH RATES POPULATION SHARE POVERTY ANALYSIS POVERTY ASSESSMENT POVERTY CHANGES POVERTY COMPARISONS POVERTY DYNAMICS POVERTY GAP POVERTY HEADCOUNT POVERTY INCIDENCE POVERTY INDEXES POVERTY INDICATOR POVERTY ISSUES POVERTY LINE POVERTY LINES POVERTY MEASURES POVERTY OUTCOMES POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY REDUCTION STRATEGY PRICE CHANGES PRODUCERS PROFIT FUNCTIONS PROPORTIONATE CHANGES PUBLIC EXPENDITURE PUBLIC POLICY PURCHASING POWER PURCHASING POWER PARITY RAPID GROWTH REAL GROWTH REDUCED POVERTY REGIONAL DISPARITIES REGRESSION ANALYSIS REPRESENTATIVE SAMPLE RESOURCE ALLOCATION RESOURCE ENDOWMENTS RURAL AREAS RURAL POVERTY SAVINGS SENSITIVITY ANALYSIS SIGNIFICANT REDUCTION SOCIAL INDICATORS SOCIAL POLICIES SQUARED POVERTY GAP TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRADE SHOCKS URBAN AREAS URBAN HOUSEHOLDS UTILITY FUNCTION WAGE INCOME WAGE RATES WAGES WORLD TRADE ORGANIZATION The importance of distributional issues in policymaking creates a need for empirical tools to assess the social impact of economic shocks and policies. This paper reviews some of the modeling approaches that are currently in use at the World Bank and other international financial institutions. The specification of these models is dictated by the issues at stake, the knowledge about the nature of the process involved, and the availability and reliability of relevant data. Furthermore, shocks and policies have macroeconomic, structural, and distributional implications. This creates interdependence between such policy issues. Finally, the distributional impact of shocks and policies hinges on the heterogeneity of socioeconomic agents with respect to endowments and behavior. In the end, each modeling approach should be judged on how well it handles the interdependence between policy issues and the heterogeneity of the stakeholders, given other constraints. 2012-06-20T22:32:10Z 2012-06-20T22:32:10Z 2005-08 http://documents.worldbank.org/curated/en/2005/08/6213800/poverty-distributional-impact-macroeconomic-shocks-policies-review-modeling-approaches http://hdl.handle.net/10986/8614 English Policy Research Working Paper; No. 3682 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research

The Poverty and Distributional Impact of Macroeconomic Shocks and Policies : A Review of Modeling Approaches

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