Essama-Nssah, B.2012-06-202012-06-202005-12https://hdl.handle.net/10986/8543Developing countries face a host of macroeconomic challenges in the design and implementation of development strategies and policies. The importance of the underlying poverty and distributional issues creates a need for relevant and reliable ways of tracking the social impact of shocks and policies. This paper describes and demonstrates the use of a stylized framework for simulating the poverty implications of the Dutch disease, a change in the terms of trade and budgetary policy. The basic approach is to embed a Lorenz model of the size distribution of economic welfare in a general equilibrium model of an open economy. It is observed that, while aggregate welfare and poverty effects may be negligible, the structural and distributional impacts tend to be significant. The latter drive the political economy of policymaking and point to the need for an analytical framework that accounts for both the structural richness of the economy and the heterogeneity of the stakeholdersCC BY 3.0 IGOADVERSE EFFECTADVERSE IMPACTAGGREGATE DEMANDAGGREGATE INCOMEBASE YEARBENCHMARKBETWEEN-GROUP INEQUALITYCASH CROPSCHANGES IN POVERTYCIRCULAR FLOWCOMPETITIVENESSCONSTANT ELASTICITYCONSTANT RETURNSCONSTANT RETURNS TO SCALECONSUMERCONSUMPTION INCREASESCUMULATIVE DISTRIBUTIONCUMULATIVE DISTRIBUTION FUNCTIONDATA AVAILABILITYDATA SETDEBTDECOMPOSABLE POVERTYDECOMPOSABLE POVERTY MEASURESDEMAND FUNCTIONSDENSITY FUNCTIONDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDEVELOPMENT STRATEGIESDISTRIBUTIONAL IMPACTDISTRIBUTIONAL IMPLICATIONSECONOMIC ACTIVITYECONOMIC GROWTHECONOMIC PERFORMANCEECONOMIC POLICYECONOMIC REFORMECONOMIC SURVEYSECONOMIC SYSTEMSECONOMICSELASTICITYELASTICITY OF SUBSTITUTIONEMPIRICAL MODELENDOGENOUS VARIABLESEQUILIBRIUMEQUILIBRIUM PRICESEQUILIBRIUM VALUESEXCHANGE RATEEXCHANGE RATESEXOGENOUS SHOCKSEXOGENOUS VARIABLESEXPORTSFACTOR DEMANDFISCAL POLICYFOOD CONSUMPTIONFOOD POLICYFOREIGN EXCHANGEFUNCTIONAL DISTRIBUTIONFUNCTIONAL FORMGDPGENERAL EQUILIBRIUM ANALYSISGENERAL EQUILIBRIUM MODELGINI COEFFICIENTHOUSEHOLD DATAHOUSEHOLD EXPENDITURESIMPACT OF SHOCKSIMPERFECT COMPETITIONIMPORTIMPORTSINCENTIVE EFFECTSINCOMEINCOME DISTRIBUTIONINCOME EFFECTINEQUALITY MEASURESINTERNATIONAL TRADELORENZ CURVEMACROECONOMIC ADJUSTMENTMACROECONOMIC EFFECTSMACROECONOMIC SHOCKSMACROECONOMIC STABILITYMACROECONOMICSMEASURING POVERTYMONETARY POLICIESMONETARY POLICYNUTRITIONOPEN ECONOMYOPTIMIZING BEHAVIORPOLICY ANALYSISPOLICY ISSUESPOLICY RESEARCHPOLICY REVIEWPOLITICAL ECONOMYPOVERTY ANALYSISPOVERTY DECLINESPOVERTY GAPPOVERTY IMPACTPOVERTY INCIDENCEPOVERTY INCREASESPOVERTY LINEPOVERTY MEASUREMENTPOVERTY REDUCTIONPRIVATE SECTORPRODUCTION FUNCTIONSPROFIT MAXIMIZATIONPUBLIC EXPENDITUREREAL INCOMEREGRESSION ANALYSISRELATIVE INEQUALITYRESEARCHRURAL AREARURAL HOUSEHOLDRURAL HOUSEHOLDSRURAL POPULATIONRURAL POVERTYRURAL POVERTY INCIDENCERURAL POVERTY REDUCTIONSALESSTRUCTURAL ADJUSTMENTSUBSTITUTION EFFECTTAXATIONTOTAL POVERTYTRADABLE SECTORSTRADE BALANCETRADE LIBERALIZATIONTRADE POLICIESURBAN AREASURBAN POVERTYUSERWELFARE INDICATORWorld Bank10.1596/1813-9450-3788