Ahmed, Vaqar and O' Donoghue, Cathal (2008): Welfare impact of external balance in pakistan: CGE-microsimulation analysis.
Download (229Kb) | Preview
This paper studies the welfare impact of changes in the external balance of a developing economy (Pakistan). We explain that the economic growth achieved during the past decade is highly dependent on the improvements in external balance. After 2001, Pakistan has benefited from, an increase in the inflow of remittances, foreign assistance from bilateral and multilateral sources, and a relatively stable exchange rate. This was complimented by growth in the real sector. The GDP grew at an average of 7 percent from 2002 to 2007. During the same time period the growth in per-capita income was around 13 percent in dollar terms. This performance however has come under pressure due to the rising inflation, slowing down of global economy and external price shocks. The increase in import price of petroleum, raw materials and other manufactured goods has the potential of reducing the growth performance, impacting the competitiveness of the economy and thereby threatening the gains achieved during the past seven years in reducing the poverty levels. We study using a CGE-microsimulation model the effects of changes in import prices faced by Pakistan. Also provided in the simulation exercise is an analysis of increase in foreign savings that are usually prescribed for developing economies in order to augment the domestic savings and channelling investment towards developments in infrastructure and social sectors.
|Item Type:||MPRA Paper|
|Original Title:||Welfare impact of external balance in pakistan: CGE-microsimulation analysis|
|Keywords:||Computable General Equilibrium Model; Microsimulation; Balance of Payments; Economic Growth; Poverty; Inequality; Pakistan|
|Subjects:||D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D58 - Computable and Other Applied General Equilibrium Models
C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics
|Depositing User:||Vaqar Ahmed|
|Date Deposited:||24. Jun 2008 01:28|
|Last Modified:||13. Feb 2013 19:44|
Adams R. H. (1995), “Sources of Income Inequality and Poverty in Rural Pakistan”. Research Report 102, IFPRI, Washington D.C.
Adelman I., and S. Robinson (1978), “Income Distribution in Developing Countries: A Case Study of Korea”. Oxford University Press, 1978.
Ahmed, V. and C. O’ Donoghue (2007) “Linking CGE and Microsimulation Model for Pakistan: A Computational Analysis of PRISM”, Working Paper, Department of Economics, National University of Ireland, Galway.
Alatas V. and Bourguignon F. (2000), “The Evolution of the Distribution of Income During Indonesian Fast Growth: 1980 – 1996”, Mimeo. Princeton University.
Bourguignon F., Ferreira F. and Lustig N. (1998), “The Microeconomics of Income Distribution Dynamics, A Research Proposal”, The Inter-American Development Bank and the World Bank, Washington.
Bourguignon F., Fournier M. and Gurgand M. (2001), “Fast Development with a Stable Income Distribution: Taiwan, 1979 – 1994”, Review of Income and Wealth, 47(2), pp. 139-163.
Bourguignon F., Robilliard, A-S. and Robinson, S. (2003), “Representative versus Real Households in the Macro-Economic Modelling of Inequality”, Document de Travail 2003-10, DIAL.
Bussolo, M. and J. Lay (2003) “Globalization and Poverty Changes in Colombia”. OECD Development Center Working paper no. 226.
Coady, D.P. and R. Lee Harris (2004) “Evaluating Targeted Cash Transfer Programs: A General Equilibrium Framework with an Application to Mexico”. International Food Policy Research Institute, Research Report 137.
Dervis, K., J. de Melo, and S. Robinson (1982), “General equilibrium models for development policy”, New York: Cambridge University Press.
Dorosh, P., M. K. Niazi, H. Nazli (2004), “A Social Accounting Matrix for Pakistan, 2001-02: Methodology and Results”, a background research paper for the Pakistan Rural Factor Markets Study, World Bank, South Asia Rural Development Unit, 2004.
Go, D. S. (1991) “External Shocks, Adjustment Policies, and Investment: Illustrations from a Forward-Looking CGE Model of the Philippines”. WPS 737, World Bank 1991. GoP (2004) “Trade Policy of Pakistan 2003-04”, Issued by Ministry of Commerce in Islamabad, 2004, http://www.phdeb.org.pk/download/TradePolicy2003-04.pdf.
Hérault, N. (2006) “Building and Linking a Microsimulation Model to a CGE Model for South Africa”, South African Journal of Economics, Vol. 74-03. ILO (1996) “Wage Workers in Agriculture: Conditions of Employment and Work”. International Labour Office, Geneva, 1996.
Khan, M.Z. (2005) “Pakistan’s share only 0.06pc: Services sector”, Article published in the daily Dawn, July 15, 2005. Lofgren, H., R. Lee Harris, S. Robinson, M. Thomas, M. El-Said, (2002) “A Standard Computable General Equilibrium Model in GAMS”, Microcomputers in Policy Research 5, International Food Policy Research Institute, Washington D.C. 2002.
Robilliard, A.-S., F. Bourguignon and S. Robinson (2001) “Crisis and Income Distribution: A Micro-Macro Model for Indonesia”. Paper presented at the OECD Development Centre Conference, 9-10 December 2002, Paris, France. Robinson, Sherman and Moataz El-Said (2000) "GAMS Code for Estimating a Social Accounting Matrix (SAM) Using Cross Entropy Methods (CE)" Discussion Paper 64, Trade and Macroeconomics Division, IFPRI, December 2000. Saeed, K.A., (2005) “Economy of Pakistan”, 2005 Edition, Lahore, Pakistan.
Voyvoda, E. and E. Yeldan (2005) “Turkish Macroeconomics under the IMF Program: Strangulation of the Twin-Targets, Lopsided Growth and Persistent Fragilities”. Paper presented at the 9th Congress of the Turkish Social Sciences Association, December 2005, Ankara.