Narayan, AmbarSánchez-Páramo, Carolina2012-03-192012-03-192012-01-12978-0-8213-8981-2https://hdl.handle.net/10986/2229Economists have long sought to predict how macroeconomic shocks will affect individual welfare. Macroeconomic data and forecasts are easily available when crises strike. But policy action requires not only understanding the magnitude of a macro shock, but also identifying which households or individuals are being hurt by (or benefit from) the crisis. Moreover, in many cases, impacts on the ground might be already occurring as macro developments become known, while micro level evidence is still unavailable because of paucity of data. Because of these reasons, a comprehensive real-time understanding of how the aggregate changes will translate to impacts at the micro level remains elusive. This problem is particularly acute when dealing with developing countries where household data is sporadic or out of date. This volume outlines a more comprehensive approach to the problem, showcasing a micro simulation model, developed in response to demand from World Bank staff working in countries and country governments in the wake of the global financial crisis of 2008-09. During the growing catastrophe in a few industrialized countries, there was rising concern about how the crisis would affect the developing world and how to respond to it through public policies. World Bank staff s was scrambling to help countries design such policies; this in turn required information on which groups of the population, sectors and regions the crisis would likely affect and to what extent. The volume is organized as follows. Chapter 1 summarizes the methodology underlying the micro simulation model to predict distributional impacts of the crisis, along with several case studies that highlight how the model can be used in different country contexts. Chapters 2 to 4 are written by experts external to the Bank, two of whom participated as discussants at a workshop on the micro simulation work organized in May, 2010 at the World Bank headquarters. Chapter 2 comments on the broader implications and shortcomings of applying the technique described in Chapter 1 and the ability or willingness of governments to respond adequately to its results. Chapter 3 draws parallels between the United States and developing countries to discuss the lessons that can be learned for mitigating the impacts of future crises. Chapter 4 discusses how the micro simulation approach can be sharpened to make it a better tool for distributional analysis moving forward.CC BY 3.0 IGOACCOUNTINGAGGREGATE EMPLOYMENTAGGREGATE INEQUALITYAGGREGATE OUTPUTANTI-POVERTYANTI-POVERTY PROGRAMSAVERAGE INCOMEBENEFICIARIESCALORIE INTAKECONSTANT POVERTY LINECOUNTERFACTUALCRISESDATA REQUIREMENTSDEMOGRAPHIC CHANGESDEVELOPED COUNTRIESDEVELOPED WORLDDEVELOPING COUNTRIESDEVELOPING WORLDDEVELOPMENT INSTITUTIONSDISTRIBUTIONAL EFFECTSDISTRIBUTIONAL IMPACTECONOMIC CONDITIONSECONOMIC GROWTHELASTICITYEMPIRICAL EVIDENCEEMPIRICAL WORKEMPLOYMENT IMPACTSEMPLOYMENT STATUSEXTREME POVERTYEXTREME POVERTY LINESFARMERSFEMALE EMPLOYMENTFEMALE PARTICIPATIONFINANCIAL CRISISFINANCIAL MARKETSFOOD BASKETFOOD PRICEFOOD PRICESFOOD REQUIREMENTSGENERAL EQUILIBRIUMGENERAL EQUILIBRIUM MODELSGLOBAL MARKETSGROWTH RATESHISTORICAL DATAHOUSEHOLD DATAHOUSEHOLD HEADSHOUSEHOLD INCOMEHOUSEHOLD INCOMESHOUSEHOLD MEMBERSHOUSEHOLD SURVEYIMPACT ON POVERTYINCOMEINCOME DISTRIBUTIONINCOME DISTRIBUTIONSINCOME GAINSINCOME GROUPSINCOME GROWTHINCOME LEVELINCOME LEVELSINCOME SCALEINCOME SHOCKINCOME SHOCKSINCOME SOURCEINCOME SOURCESINCOMESINDIVIDUAL COUNTRIESINEQUALITYINEQUALITY MEASURESINNOVATIONSINSURANCELABOR FORCELABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKETSMACROECONOMIC MISMANAGEMENTMACROECONOMIC SHOCKSMIDDLE CLASSNATIONAL POVERTYNEW POORNOMINAL WAGESNUTRITIONOCCUPATIONSOUTPUTSPARTICIPATION RATESPER CAPITA INCOMEPOLICY CHANGESPOLICY DECISIONSPOLICY DESIGNPOLICY INTERVENTIONSPOLICY MEASURESPOLITICAL ECONOMYPOORPOOR HOUSEHOLDSPOOR RURAL HOUSEHOLDSPOPULATION GROWTHPOVERTY ESTIMATESPOVERTY GAPPOVERTY HEADCOUNTPOVERTY HEADCOUNT RATEPOVERTY IMPACTPOVERTY IMPACTSPOVERTY INCREASEPOVERTY INDICESPOVERTY LINEPOVERTY LINESPOVERTY PROGRAMSPOVERTY RATEPOVERTY RATESPOVERTY REDUCTIONPRICE CHANGESPRIVATE TRANSFERSPRODUCTIVITYPUBLIC POLICIESPUBLIC TRANSFERSREAL OUTPUTRELATIVE IMPORTANCERELATIVE PRICESRENTSRURALRURAL AREASRURAL HOUSEHOLDRURAL INCOMESAFETYSAFETY NETSAFETY NET PROGRAMSSAFETY NETSSIGNIFICANT DIFFERENCESSOCIAL ASSISTANCESOCIAL BENEFITSSOCIAL POLICYSOCIAL PROGRAMSSUSTAINABLE DEVELOPMENTTARGETINGTRANSFER PROGRAMSUNEMPLOYEDUNEMPLOYMENTUNEMPLOYMENT BENEFITSUNEMPLOYMENT RATEWAGESYOUNG WORKERSWorld Bank10.1596/978-0-8213-8981-2