[HTML][HTML] Growth, distribution and poverty in Madagascar: Learning from a microsimulation model in a general equilibrium framework

D Cogneau, AS Robilliard - Microsimulation as a tool for the …, 2007 - books.google.com
D Cogneau, AS Robilliard
Microsimulation as a tool for the evaluation of public policies …, 2007books.google.com
The nature of the links between economic growth, poverty and income distribution is central
to the study of economic development. A number of approaches have been taken to analyze
these links. This debate has also contributed to raising the question of how to construct
suitable tools to analyze the impact of macroeconomic policies on poverty and income
distribution. More recently, this led to the development of tools for counterfactual analysis to
study the impact of structural adjustment policies. Among these tools, computable general …
The nature of the links between economic growth, poverty and income distribution is central to the study of economic development. A number of approaches have been taken to analyze these links. This debate has also contributed to raising the question of how to construct suitable tools to analyze the impact of macroeconomic policies on poverty and income distribution. More recently, this led to the development of tools for counterfactual analysis to study the impact of structural adjustment policies. Among these tools, computable general equilibrium (CGE) models are widely used, because of their ability to produce disaggregated results at the microeconomic level, within a consistent macroeconomic framework (Adelman and Robinson 1988; Dervis et al. 1982; Taylor 1990; Bourguignon et al. 1991; De Janvry et al. 1991). Despite this ability, CGE models rest on the assumption of the representative agent, for both theoretical and practical reasons. From the theoretical point of view, the existence and uniqueness of equilibrium in the Arrow Debreu model are warranted only when the excess demand of the economy has certain properties (Kirman 1992; Hildenbrand 1998). The assumption that the representative agent has a quasi-concave utility function ensures that these properties are met at the individual level, which, in turn, makes it possible to give microeconomic foundations to the model without having to solve distributional problems. From a
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