Working Paper: CEPR ID: DP1482
Authors: Francois Bourguignon; Sylvie Lambert; Akiko Suwa-Eisenmann
Abstract: We address the issue of social distribution of an aggregate risk (on agricultural export price), from a macroeconomic perspective. Individual incomes in representative social groups are computed as a function of export prices, which are assumed to be stochastic, using an applied general equilibrium model of an archetype developing economy. The statistical properties of the resulting distribution of individual incomes are then examined. We consider a mapping of different policies on agricultural prices (stabilization or complete pass-through), monetary rules (accommodating or not) and exchange rate regimes (fixed versus flexible).
Keywords: Computable General Equilibrium Models; International Trade; Distribution of Risk
JEL Codes: D39; D58; O11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| export price fluctuations (F31) | individual income variations (D31) |
| export shocks (F41) | risk borne by rural and urban poor (R20) |
| stabilizing domestic producer prices (P22) | income distribution (D31) |
| flexibility of the economy (O51) | risk distribution (D39) |
| imperfect labor or capital markets (J46) | protection of certain groups (J15) |
| export price shocks (F14) | changes in demand and supply dynamics (J20) |
| export price shocks (F14) | risk borne by urban and rural households (R20) |
| risk borne by urban and rural households (R20) | poorer households' risk relative to income (G59) |