Macroeconomic Performance and Poverty Reduction

April 1, 2003

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Format: Chicago

Anne Epaulard. Macroeconomic Performance and Poverty Reduction, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper investigates the link between macroeconomic performance and the change in the poverty rate among 47 episodes of growth and 52 episodes of economic downturn in developing and transition economies. We show that, on average, (i) the greater the inequality, the lower the elasticity of poverty to growth, and the higher the mean income, the higher the elasticity; (ii) the country-specific elasticity is identical for episodes of economic growth and for episodes of economic downturn; and (iii) higher growth does not bring diminishing returns to poverty reduction. Moreover, we show that very high inflation is associated with a higher elasticity of the poverty rate to economic downturn, but at lower inflation, there is no relationship between inflation and the elasticity of the poverty rate to growth or recession. Trade openness and changes in the terms of trade explain part of the elasticity of the poverty rate to economic downturn.

Subject: Income distribution, National accounts, Personal income, Poverty, Poverty reduction, Poverty reduction strategy

Keywords: Absolute value, Africa, Asia and Pacific, D ln, Day headcount poverty rate, Day poverty rate, East Asia, Economic growth, Efficiency ratio, Elasticity of poverty, Elasticity of the poverty rate, Growth, Income Distribution, Inflation rate, Macroeconomic Policies, Middle East, Personal income, Poverty, Poverty reduction, Poverty reduction strategy, South Asia, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/072
Stock No:

WPIEA0722003
ISBN:

9781451849363
ISSN:

1018-5941

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