A Macroeconomic Framework for Quantifying Growth and Poverty Reduction Strategies in Niger
World Bank, Africa Technical Families, Poverty Reduction and Economic Management 3, 2005 - Economic assistance, Domestic - 73 pages
"The authors apply the dynamic macroeconomic framework developed by Agénor, Bayraktar, and El Aynaoui (2004) to Niger. As in the original model, linkages between foreign aid, public investment (disaggregated into education, infrastructure, and health), and growth are explicitly captured. Although the nominal exchange rate is fixed, the relative price of domestic goods is endogenous, thereby allowing for potential Dutch disease effects associated with increases in aid. The authors assess the impact of policy shocks on poverty by using partial growth elasticities. They perform various policy experiments, including an increase in the level of foreign aid, a reallocation of public investment toward infrastructure, and neutral and non-neutral cuts in tariffs. The simulations show the dynamic tradeoffs that these policies entail with respect to growth and poverty reduction in Niger. This paper--a product of Poverty Reduction and Economic Management 3, Africa Technical Families--is part of a larger effort in the region to formulate country-specific growth strategies"--World Bank web site.
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adjustment Agenor aggregate demand aid-to-GDP ratio average Aynaoui baseline Bayraktar capital formation capital in health capital in infrastructure CFAF coefficient composite input consumption per capita declined depreciation direct tax direct tax rate disposable income DlTAX domestic sales domestic-currency price Durbin-Watson statistic Dutch Disease economic educated labor elasticity of 0.5 elasticity of substitution equation estimated expenditure exports external FdebtG food aid foreign aid foreign debt GBAL Gini coefficient given Growth rate increase in aid indirect infrastructure capital January 2005 January KGhea KGinf lagged value lNDTAX macroeconomic Niger non-neutral o o o parameter in production percent of GDP percentage points points of GDP price of imports private capital private investment PRSP public capital Public lnvestment rate of real raw labor real exchange rate Real GDP result simulation period stock and flow stock of public tariff tariff rate tax revenue total public investment variables WAEMU World Bank YTOT