The Impact of Macroeconomic Policies on Poverty and Income Distribution

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This book assembles methodologies and techniques to evaluate the poverty impact of macroeconomic policies. It takes as a departure point a companion volume, the impact of economic policies on poverty and income distribution: evaluation techniques and tools. This volume was primarily a review of microeconomic techniques aimed at assessing policies that are directly concerned with the welfare of poor households or individuals such as changing the level of cash transfers to the poorest households, increasing price subsidies for basic consumer goods, and the like. In addition, the second part of that earlier publication introduced basic techniques to deal with the poverty impact of macroeconomic policies that by definition are not targeted and affect the whole population. This volume presents a comprehensive array of macro-micro modeling frameworks. It begins by highlighting the limitation of macroeconomic models that use representative household groups to link macroeconomic policies and microeconomic data. It then moves to more complexes, top-down modeling frameworks, which combine (top) macro models and (down) micro simulation models that, in turn, can be simple micro accounting models or behavioral micro models. The book also explores integrated models, in which the macro and micro parts are either linked by iterative feedback loops or solved simultaneously as a single model. By providing clear access to these techniques, by documenting their analytical underpinnings, their data requirements, and their range of applicability, and even by highlighting some of their limitations, this book provides a unique compendium for practitioners, policy makers, and anyone interested in economic development. (Editor Abstract)