Integrated Computable Simulation Approach

Abstract

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.

Evaluating Factors Affecting Performance of Land Reform Beneficiaries in South Africa

“…It is of paramount importance that productive land, including that in the hands of previously disadvantaged South Africans, remains productive to ensure that the land reform programme does not negatively impact the agriculture sector's performance and food security. The importance of empirical evidence in shaping the land reform policy agenda has long been acknowledged [23] and several strides have been made by a plethora of researchers in a bid to provide the much-needed input for policy formulation [22,24,25]. A significant share of existing literature focuses on evaluating the impact of land reform [19,22,24,26].…”

Land redistribution and the South African economy

“…The literature review indicates that the main focus of previous studies has been either to estimate the economy-wide impacts of rural land redistribution using a static CGE model, or to provide theoretical insights on the impact of rural land redistribution (Cockburn et al 2010). This being the case, Bernstein (2013) is of the opinion that, although there has been a significant focus on the analysis of the impact of rural land redistribution on economic growth over the last decade, the topic remains a topical issue, especially in South Africa.…”

The impact of Oportunidades on human capital and income distribution in Mexico: A top-down/bottom-up approach

“…Macroand microsimulation models can be linked in different ways. The link can be made by explicitly including selected micro behavior, typically labor supply or consumption demand, into a macro model (the integrated approach), so that a single model reflects relevant micro and macro behavior in the economy under analysis (Cogneau and Robilliard 2006;Cockburn 2006;Cockburn, Corong, and Cororaton 2010). Alternatively, the macro and the micro models can be "layered" in the sense that the two models are kept as different entities with some degree of communication between them.…”