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Commodity prices, trade, and poverty in Uruguay

Carmen Estrades () and María Terra

Food Policy, 2012, vol. 37, issue 1, 58-66

Abstract: The 2006–2008 food price spike raised concerns about the impact of high commodity prices on poverty in developing countries. This paper addresses these concerns in relation to Uruguay, a small country that exports agricultural commodities and imports fuels. Applying a general equilibrium model, we find that, as a whole, an increase in commodity prices has a positive effect on the economy of Uruguay. Benefits obtained through a growth in export activities are partially outweighed by an increase in crude oil prices. In this context, extreme poverty increases. As in other countries, the increase in food prices affects the already poor population, who become even poorer. This fact highlights the need for policies that mitigate the negative effects of price shocks.

Keywords: Commodity prices; Poverty; International trade; Computable general equilibrium model (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1016/j.foodpol.2011.11.007

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