Trade, growth, and poverty in Zambia: Insights from a dynamic GE model

We analyze how trade policy and aid affect poverty and economic development in a dynamic optimizing model that features a full array of imports (intermediates, consumer goods, and capital goods), transport and distribution costs, sector-specific capital, public investment in social and physical infr...

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Bibliographic Details
Published in:Journal of policy modeling 2012-03, Vol.34 (2), p.211-229
Main Authors: Buffie, Edward F., Atolia, Manoj
Format: Article
Language:English
Subjects:
Aid
Distribution costs
Economic development
Economic models
Exports
Infrastructure
International trade
Investment
Labour market
Poverty
Public expenditure
Public infrastructure
Studies
Tariffs
Trade liberalization
Trade policy
Zambia
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Summary:We analyze how trade policy and aid affect poverty and economic development in a dynamic optimizing model that features a full array of imports (intermediates, consumer goods, and capital goods), transport and distribution costs, sector-specific capital, public investment in social and physical infrastructure, learning externalities, and a dualistic labor market. Our main finding is that policy packages that combine an escalated structure of protection with an escalated structure of export promotion score best; there is no support for the view that free trade or a low uniform tariff is approximately optimal.
ISSN:0161-8938
1873-8060
DOI:10.1016/j.jpolmod.2011.07.011