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Free Trade Agreements, Poverty and Inequality in Central America

Author

Listed:
  • Rivera, Luis
  • Rojas-Romagosa, Hugo

Abstract

We use a top-down macro-micro approach to estimate the e§ects on poverty and income inequality of two major trade agreements in Central America: DR-CAFTA and EU-CAAA. We Örst employ a macro CGE application to assess the main changes in factor and goods prices associated with each trade agreement; and then combine this information with household surveys for Costa Rica and Nicaragua. Headcount poverty is reduced in both countries, although DR-CAFTA provides the largest decreases. Inequality in Costa Rica remains unchanged with both agreements, although it increases slightly in Nicaragua under the EU-CAAA.

Suggested Citation

  • Rivera, Luis & Rojas-Romagosa, Hugo, 2007. "Free Trade Agreements, Poverty and Inequality in Central America," Conference papers 331615, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331615
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    File URL: https://ageconsearch.umn.edu/record/331615/files/3355.pdf
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