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The paper examines the possible impact of Doha agreement on Philippine poverty. Using a detailed CGE analysis, the agreement is observed to depress world demand for Philippine agricultural exports, and thus slightly increase poverty, especially among rural households. However, an ambitious full trade liberalization scenario, which involves free world trade and domestic liberalization, leads to increased industrial exports that favor urban households. These impacts are driven primarily by domestic trade liberalization, as free world trade favors the agricultural sector by increasing the cost of competing agricultural imports.

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This paper analyzes the impact of expansion in biofuels on the global economy, income distribution and poverty. It utilizes simulation results of two World Bank models: a global computable general equilibrium (CGE) model integrated with biofuels, land-use, and climate change modules, and a global income distribution model that utilizes household survey data of 116 countries. The first model simulates the effects over time of large scale expansion of biofuels on resource allocation, output prices, commodity prices, factor prices, and household income of the different countries and regions in the world. The second model uses these results recursively to calculate the impact on global income distribution and poverty. The results from the CGE model indicate that large scale expansion of biofuels lead to higher world prices of sugar, corn, oilseeds, wheat, and other grains, which lead to higher food prices. The increase in food inflation is higher in developing countries than in developed countries. The expansion of biofuels results in higher wages of unskilled rural labor relative to wages of the other labor types which are skilled urban, skilled rural, and unskilled urban, especially in developing countries. These positive wage effects on unskilled rural labor trigger movement of unskilled urban labor towards rural and agriculture. This is because production of feedstock in developing countries is relatively intensive in the use of unskilled rural labor. The effects of large scale expansion of biofuels on poverty vary across regions. But overall there is a slight increase in global poverty. The increase largely comes from South Asia (particularly India) and Sub-Saharan Africa. Significant number of countries in Sub-Saharan Africa show higher poverty with large scale expansion of biofuels. However, poverty declines in East Asia and Latin America regions. Overall, there is a slight increase in the GINI coefficient. There is a slight increase in the GINI coefficient in Sub-Saharan Africa and East Asia. There is a small reduction in the GINI coefficient in the rest of the regions.

higher productivity. Simulation 4 examines cases of higher industry TFP in raw cotton, cotton lint and yarn, and textiles in both the short and long run using a dynamic-recursive version of the CGE model. The increase in TFP is welfare-increasing, with dynamic effects and the level of impact among the cotton-textile sectors and across household groups depending on whether productivity improves in one or more of these highly interdependent sectors. Overall the results of simulations 1 and 2 demonstrate different effects arising from two largely external positive shocks: the increase in foreign savings strengthens the currency and creates a boom in the nontrade sectors, whereas an increase in world cotton or textile prices improves Pakistan's terms of trade and generates a boom in these sectors in particular. An inflow of foreign savings depresses traded sectors but stimulates investment and expanded production of nontraded goods. Because of the large share of the cotton-related sectors in overall exports, an export boom in these sectors also strengthens the currency, which negatively affects other tradables and the domestic currency value of household income from any given level of foreign remittances. These different effects must be understood by policymakers trying to assess, for example, the performance of the cotton, yarn, and textile sectors and their impacts on employment and poverty. These impacts must be evaluated in light of more liberalized trade rules, the capital inflow or increase in foreign remittances that occurred during 2000-06, the decline in world cotton prices in the 1990s, and the reversal of these circumstances that has recently been evident. Simulations 3 and 4 are relevant to policymakers who must direct limited domestic resources to capacity-building public investments but who also face calls for more direct support from industry lobbies.

Conventionally, the analysis of macroeconomic shocks and the analysis of income distribution and poverty require very different methodological techniques and sources of data. Over the last decade however, the natural divide between both approaches has diminished, as evaluating the impact of macroeconomic shocks on poverty and income distribution within a CGE framework complemented by household survey data has flourished. This paper focuses on explicitly integrating into a CGE model each household from a nationally representative household survey. The aim of this paper is threefold. First, we show that explicitly modelling each household in the CGE model addresses Kirman's critique (1992) and overcomes the strong micro-economic assumption of representative agent. Second, we respond, albeit in a simple way, to the recommendation of Bourguignon and Perreira (2003) to integrate-real‖ households within a CGE framework rather than using representative households. Third, by providing applications to Nepal and the Philippines, we demonstrate that this technique is straightforward to implement and requires only a standard CGE model and a nationally representative household survey with information on household income and consumption.

A computable general equilibrium micro‐simulation model is used to assess the economic and poverty impacts of tariff reduction in the Philippines. Tariff reduction induces consumers to substitute cheaper imported agricultural products for domestic goods, thereby resulting in a contraction in agricultural output. In contrast, tariff reduction reduces the domestic cost of production, benefiting the outward‐oriented and import‐dependent industrial sector. The national poverty headcount decreases marginally as lower consumer prices outweigh the nominal income reduction experienced by the majority of households. However, both the poverty gap and severity of poverty worsens, implying that the poorest of the poor become even poorer.

The paper examines the possible impact of Doha agreement on Philippine poverty. Using a detailed CGE analysis, the agreement is observed to depress world demand for Philippine agricultural exports, and thus slightly increase poverty, especially among rural households. However, an ambitious full trade liberalization scenario, which involves free world trade and domestic liberalization, leads to increased industrial exports that favor urban households. These impacts are driven primarily by domestic trade liberalization, as free world trade favors the agricultural sector by increasing the cost of competing agricultural imports.