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GTAP Resources: Resource Display

GTAP Resource #1337

"Trade, Exchange Rate and Energy Pricing Reform in Iran: Potentially Large Efficiency Effects and Gains to the Poor."
by Tarr, David G. and Jesper Jensen

Iran is committed to substantial trade and market reform in its 3rd Five Year Development Plan. It started, however, with non-tariff barriers on all products, a dual exchange rate regime with the market rate more than four times the official rate, and domestic energy product subsidies of about 90 percent. We develop a multi-sector computable general equilibrium model with 10 rural and 10 urban households to analyze the various reforms, separately and together. Reflecting the large initial distortions, we find that the combined reforms could generate large welfare gains equal to about 50 percent of aggregate consumer income. Moreover, our results show that well- intentioned policies of commodity subsidies for the poor can have perverse effects. Even non-targeted direct income payments to all households (not just the poor) would enormously and progressively increase the incomes of the poor compared to the status quo.

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Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Published
By/In: Review of Development Economics, forthcoming
Date: 2003
Created: Tarr, D. (8/8/2003)
Updated: Tarr, D. (8/28/2007)
Visits: 2,283
- Domestic policy analysis
- Middle East

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