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Citation Information

Type Conference Paper - 15th Annual Conference on Global Economic Analysis
Title Trade Liberalization, Urban-Rural Remittances and Income Inequalities in Senegal: Lessons from a CGE Analysis.
Author(s)
Publication (Day/Month/Year) 2012
City Geneva
Country/State Switzerland
URL http://ecomod.net/system/files/LaetitiaLeroy-ECOMOD2012_1.pdf
Abstract
This paper aims at assessing how domestic urban-rural remittances can mitigate macroeconomic shocks in a developing country. When trade liberalization occurs, it may a§ect the national income structure and increase regional poverty and many studies underline that private transfers can significantly help households deal with exogenous risk, when similar studies also find evidence of an efficient risk sharing between the poorest households thanks to private cash exchange. We explore this issue by working on Senegal, and to deepen it, we design a single-country computable general equilibrium (CGE) to capture all the redistributive channels implied by domestic transfers in an African economy. This model is then used to simulate macroeconomic shocks liberalization and we show the importance of introducing micro foundations of domestic transfers in a general equilibrium to better capture the effects of trade liberalizationon domestic income inequalities. We test the robustness of our results, by using alternative micro founded speciÖcations of domestic transfers.

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