Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63122
Authors: 
Chand, Sheetal K.
Year of Publication: 
2003
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2003,14
Abstract: 
he IMF monetary model focuses on the balance of payments. This paper adds a poverty stabilization objective to it. Drawing on statistical income distribution theory, key aspects of the head count poverty indicator are introduced. The resulting model reproduces traditional balance of payments policy prescriptions, while showing their implications for the incidence of poverty. A balance of payments-poverty tradeoff relationship is derived. This facilitates analysis of pre-emptive policies that can stabilize the incidence of poverty when undertaking balance of payments adjustment, thereby reducing the need for costly alleviation. The suggested approach is illustrated in the context of Mexico’s 1995 stabilization episode.
Subjects: 
Poverty incidence
IMF monetary model
stabilization policy
JEL: 
E32
E61
F32
Document Type: 
Working Paper

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