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Export Taxes, World Prices, and Poverty in Argentina: A Dynamic CGEMicrosimulation Analysis

model, Argentina. Classification-JEL: C68, D58, I38, E62

Martín Cicowiez (), Javier Alejo (), Luciano Gresia (), Sergio Olivieri, World Bank () and Ana Pacheco
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Luciano Gresia: FCE-Universidad Nacional de La Plata Calle 6 #777, La Plata (1900), Argentina
World Bank: 1818 H Street, NW Washington, DC 20433, USA

International Journal of Microsimulation, 2016, vol. 9, issue 1, 24-54

Abstract: In this paper we implement a sequential dynamic computable general equilibrium model combined with a microsimulation model to assess (1) the short- and long-run economic impacts of a gradual reduction in the export tax that was introduced during the economic crisis that hit Argentina at the end of 2001, and (2) the impact of a decrease in the world prices of food products, one of the countryÂ’s main export products. Our results show that the elimination of the export tax would have different long run effects depending on the fiscal instrument that is used by the government to compensate for the loss in tax revenue. On the one hand, when the government increased direct tax rate, there is a long-run positive effect on growth. In all cases, the employment level is lower and the price of food items is higher. Therefore, the poverty headcount ratio increases. As expected, a reduction in the world price of food items (i.e., a worsening in ArgentinaÂ’s terms of trade) would impact negatively on the countryÂ’s GDP growth rate and poverty, particularly in the rural areas.

Keywords: poverty; fiscal policy; computable general equilibrium model; microsimulation (search for similar items in EconPapers)
Date: 2016
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Working Paper: Export Taxes, World Prices, and Poverty in Argentina: a Dynamic CGE-Microsimulation Analysis (2010) Downloads
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