Publication:
The Distributive Impact of Terms of Trade Shocks

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dc.contributor.authorLuongo, Patrizia
dc.contributor.authorBussolo, Maurizio
dc.date.accessioned2017-04-13T17:20:38Z
dc.date.available2017-04-13T17:20:38Z
dc.date.issued2017-03
dc.description.abstractThe halving of oil prices, which happened in a short period between late 2014 and the first months of 2015, has generated major terms of trade losses for oil exporting countries. Even if the oil producing sector normally employs a small group of workers and oil export revenues tend to be concentrated in a few firms and in government accounts, these relative price changes have economy-wide effects and significant distributive impacts. This paper describes and quantifies the channels of transmission from the drop in oil prices, to changes in welfare distribution at the household level. Using a macro-micro simulation model, the paper assesses how this shock affects poverty, inequality, and shared prosperity for the case of the Russian Federation. The oil price reduction generates a reverse Dutch disease that impacts sectoral employment, factor returns, and consumption prices. It causes a contraction of employment and wages in more skill-intensive (non-tradable) sectors, and a reduction in consumption prices that is more pronounced for nonfood than for food goods. When these shifts are mapped to changes in incomes at the micro level, all households are affected. Poverty rates could increase by 1 to 4 percentage points, depending on the poverty line used. At the US$10 a day threshold, for example, 4.1 million additional people fall into poverty. Along the consumption distribution, richer people are affected more than those in the bottom 40 percent. However, this minor progressive impact may be reversed due to increases in unemployment and cuts in social programs (transfers).en
dc.identifierhttp://documents.worldbank.org/curated/en/115331490812250507/The-distributive-impact-of-terms-of-trade-shocks
dc.identifier.doi10.1596/1813-9450-8016
dc.identifier.urihttps://hdl.handle.net/10986/26357
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8016
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectTERMS OF TRADE
dc.subjectPRICE SHOCKS
dc.subjectREDISTRIBUTION
dc.subjectPOVERTY
dc.subjectINEQUALITY
dc.subjectMACRO-MICRO SIMULATION
dc.subjectSHARED PROSPERITY
dc.subjectOIL PRICES
dc.titleThe Distributive Impact of Terms of Trade Shocksen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleThe Distributive Impact of Terms of Trade Shocks
okr.date.disclosure2017-03-29
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/115331490812250507/The-distributive-impact-of-terms-of-trade-shocks
okr.guid115331490812250507
okr.identifier.doi10.1596/1813-9450-8016
okr.identifier.externaldocumentum090224b084a5d214_1_0
okr.identifier.internaldocumentum27312467
okr.identifier.reportWPS8016
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/115331490812250507/pdf/WPS8016.pdfen
okr.statistics.combined2136
okr.statistics.dr115331490812250507
okr.statistics.drstats1830
okr.topicEnergy::Oil & Gas
okr.topicInternational Economics and Trade::Poverty and Trade
okr.topicMacroeconomics and Economic Growth::Commodities
okr.topicMacroeconomics and Economic Growth::Consumption
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.unitOffice of the Chief Economist, Europe and Central Asia Region
relation.isAuthorOfPublicationd0039343-97ad-5806-88d5-81b58fee8116
relation.isAuthorOfPublication.latestForDiscoveryd0039343-97ad-5806-88d5-81b58fee8116
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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