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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Distribution Policy under Trade Liberalisation in Zimbabwe: A CGE Analysis
Author:Chitiga, Margaret
Periodical:Journal of African Economies
Geographic term:Zimbabwe
Subjects:income distribution
income policy
Economics and Trade
External link:https://jae.oxfordjournals.org/content/9/2/101.full.pdf
Abstract:A computable general equilibrium (CGE) model is used to simulate the economy-wide and income distribution effects of transfer policies to the poor in Zimbabwe. It is based on the R. Davies et al. (1998) model and the modified version by the present author (1996). The model consists of seven income distribution groups - communal farmers, resettlement farmers, unskilled workers, agricultural wage workers, skilled workers, industrial capitalists and agricultural profit earners. The first four groups are treated as a low-income group and the last three as a high-income group. Experiments to increase each of the low-income groups' incomes by 5 percent using different sources of finance are simulated using the model. These simulations include an increase in government expenditure without budget balancing measures; an increase in government transfers offset by a decrease in government spending elsewhere; and an increase in direct or indirect taxes. The results indicate, amongst others, that a policy of increasing direct taxes and increasing the government deficit in order to support transfers to the poor are favourable in terms of increased incomes in the short run. App., bibliogr., notes, sum.