The Effects of DR-CAFTA in Nicaragua A CGE-Microsimulation Model for Poverty and Inequality Analysis

Konferenzbeitrag

In this paper, we build a Computable General Equilibrium (CGE)-microsimulation model for the economy of Nicaragua following the Top-Down approach (see Bourguignon et al., 2003), that is, the reform is simulated first at the macro level with the CGE model, and then it is passed onto the microsimulation model through a vector of changes in some chosen variables, such as prices, wage rates, and unemployment levels. This approach appears to be particularly suited to the policy reform we are willing to simulate with the model: the Free Trade Agreement of Central America with the USA is mainly a macroeconomic reform, which on the other hand can have important effects on the distribution of income. With such a model we try to study the possible changes in the distribution of income deriving from the Free Trade Agreement with USA. Our analysis finds only small changes both in the main macroeconomic variables and in the distribution of income and poverty indices.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Proceedings of the German Development Economics Conference, Zürich 2008 ; No. 6

Classification and Topics

• Classification: Wirtschaft ; Computable General Equilibrium Models ; Statistical Simulation Methods: General ; Multiple or Simultaneous Equation Models: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions ; Personal Income, Wealth, and Their Distributions
• Subject: CGE models ; microsimulation ; income distribution

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Colombo, Giulia
• Event: Veröffentlichung
• (who): Verein für Socialpolitik, Ausschuss für Entwicklungsländer
• (where): Göttingen
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/39912
• Last update: 10.03.2025, 11:44 AM CET