Cabanillas, Oscar BarrigaLugo, Maria AnaNielsen, HannahRodriguez Castelan, CarlosZanetti, Maria Pia2014-05-142014-05-142014-04https://hdl.handle.net/10986/18334The 2001/02 Argentine crisis had a profound impact on Uruguay's economy. Uruguay's gross domestic product shrank by 17.5 percent and the proportion of people living below the poverty line doubled in just two years. It took almost 10 years for the poverty rate to recover to its pre-crisis level. This paper uses a macro-micro simulation technique to simulate the impact of a similar crisis on the current Uruguayan economy. The simulation exercise suggests that Uruguay would now be in a better place to weather such a severe crisis. The impact on poverty would be considerably lower, inequality would not change significantly, and household incomes would be 8 percent lower than in the absence of a crisis (almost 9 percent lower for those households in the bottom 40 percent of the income distribution). Young individuals, female-headed households, those living in Montevideo, and those who do not have complete secondary education are more vulnerable to falling into poverty were the crisis to strike.en-USCC BY 3.0 IGOADVERSE SELECTIONAGRICULTUREANNUAL GROWTHANNUAL GROWTH RATEANNUAL RATEAVERAGE GROWTHAVERAGE INCOMEBASE YEARBENCHMARKBUSINESS CYCLESCAPITAL FLIGHTCASH TRANSFER PROGRAMSCASH TRANSFERSCENTRAL BANKCENTRALIZATIONCOMPETITIVENESSDEBTDECLINING INEQUALITYDEMAND SIDEDEMOGRAPHIC CHANGESDESCRIPTIVE STATISTICSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDISTRIBUTION EFFECTDISTRIBUTIONAL EFFECTSDISTRIBUTIONAL IMPACTDISTRIBUTIONAL IMPLICATIONSECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC INEQUALITYECONOMIC PERFORMANCEECONOMIC POLICYECONOMIC STUDIESESTIMATES OF POVERTYEXCHANGE RATEEXCHANGE RATE REGIMEEXPECTED RETURNEXPORT DIVERSIFICATIONEXPORTSEXTERNAL SHOCKSEXTREME POVERTYEXTREME POVERTY LINEEXTREME POVERTY LINESFINANCIAL CRISISFINANCIAL MARKETSFOOD BASKETFOOD PRICEFOOD PRICESFORECASTSGDPGDP PER CAPITAGOVERNMENT EXPENDITURESGROSS DOMESTIC PRODUCTGROWTH PROJECTIONSGROWTH RATESHEALTH CAREHEALTH INSURANCEHIGH INFLATIONHIGH UNEMPLOYMENT RATESHISTORICAL DATAHOUSEHOLD INCOMEHOUSEHOLD INCOMESHOUSEHOLD LEVEL DATAHOUSEHOLD MEMBERSHOUSEHOLD SURVEYHOUSEHOLD SURVEYSHOUSEHOLD WELFAREHOUSING SUBSIDIESIMPACT ON POVERTYINCIDENCE OF POVERTYINCOMEINCOME CHANGEINCOME COMPONENTSINCOME DISTRIBUTIONINCOME DISTRIBUTIONSINCOME GROWTHINCOME GROWTH RATEINCOME INEQUALITYINCOME LEVELINCOME QUINTILEINCOME SOURCESINCOME TRANSFERSINCREASED INEQUALITYINCREASING SHAREINEQUALITYINFLATION RATEINTERNATIONAL ORGANIZATIONSLABOR FORCELABOR MARKETLABOR MARKET POLICIESLABOR MARKETSLIQUIDITYMACROECONOMIC CONDITIONSMACROECONOMIC FUNDAMENTALSMACROECONOMIC PERFORMANCEMACROECONOMIC POLICIESMACROECONOMIC SHOCKSMACROECONOMIC STABILIZATIONMACROECONOMIC VARIABLESMARKET INCOMEMEAN GROWTHMEAN INCOMEMEAN INCOME GROWTHMEDIAN INCOMEMEDIUM TERMMIDDLE CLASSMONETARY POLICYMORAL HAZARDNEGATIVE GROWTHNEGATIVE IMPACTNEGATIVE SHOCKNEGATIVE SHOCKSNET EXPORTSOBSERVED EVOLUTIONOBSERVED GROWTHOBSERVED POVERTY REDUCTIONPER CAPITA INCOMEPOLICY DESIGNPOLICY DISCUSSIONSPOLICY MAKERSPOLICY OPTIONSPOLICY REFORMPOLICY RESEARCHPOORPOOR PEOPLEPOOR POPULATIONPOPULATION GROWTHPOVERTY DECLINESPOVERTY GAPPOVERTY HEADCOUNTPOVERTY HEADCOUNT RATEPOVERTY INCIDENCEPOVERTY LEVELSPOVERTY LINEPOVERTY LINESPOVERTY MEASURESPOVERTY MITIGATIONPOVERTY POVERTYPOVERTY RATEPOVERTY RATESPOVERTY REDUCTIONPOVERTY SEVERITYPRICE CHANGESPRIMARY PRODUCTSPRIVATE CONSUMPTIONPROPORTIONAL CHANGEPUBLIC TRANSFERSPUBLIC WORKSREAL GDPREAL GROWTHREAL INCOMERISK AVERSIONRURALRURAL AREASSAVINGSSAVINGS ACCOUNTSSECONDARY ENROLLMENTSIGNIFICANT IMPACTSIGNIFICANT NEGATIVESOCIAL POLICIESSOCIAL POLICYSOCIAL PROGRAMSSOCIAL PROTECTIONSOCIAL SAFETYSOCIAL SAFETY NETSSOCIAL SECURITYTARGETINGTOTAL OUTPUTUNEMPLOYMENTUNEMPLOYMENT RATEURBAN AREASURBAN GROWTH10.1596/1813-9450-6849