Are The Poverty Effects of Trade Policies Invisible?

Monika Verma, Ernesto Valenzuela and Thomas Hertel

No 61793, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: With the advent of the WTO’s Doha Development Agenda, as well as the Millennium Development Goals aiming to reduce poverty by 50 percent by 2015, poverty impacts of trade reforms have attracted increasing attention. This has been particularly true of agricultural trade reform due to the importance of food in the diets of the poor, relatively higher protection in agriculture, as well as the heavy concentration of global poverty in rural areas where agriculture is the main source of income. Yet some in this debate have argued that, given the extreme volatility in agricultural commodity markets, the additional price and poverty impacts due to trade liberalization might well be undetectable. This paper formally tests this “invisibility hypothesis” via stochastic simulation of a computable general equilibrium framework. The hypothesis test is based on the comparison of two sets of price and poverty distributions. The first originates solely from the inherent variability in global staple grains markets, while the second combines the effects of this inherent variability and trade reform. Results indicate that the short-run impacts of trade liberalization on poverty are not distinguishable from market volatility in majority of the fifteen focus countries – suggesting that the poverty impacts of agricultural trade liberalization may indeed be invisible.

Keywords: Financial Economics; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 52
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Are The Poverty Effects of Trade Policies Invisible? (2011)
Working Paper: Are the Poverty Effects of Trade Policies Invisible? (2011)
Working Paper: Are the Poverty Effects of Trade Policies Invisible? (2011)
Working Paper: Are the Poverty Effects of Trade Policies Invisible? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61793

DOI: 10.22004/ag.econ.61793

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