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Alternative Approach to Economic Restructuring to Benefit the Poor – Sam Multipliers Analysis as Alternative Approach

Author

Listed:
  • Acharya Sanjaya

    (Faculty of Economics Saraswati Campus - Tribhuvan University Kathmandu, Nepal)

  • Signorelli Marcello

    (Department of Economics, Finance and Statistics University of Perugia Perugia, Italy)

  • Vojinovic Borut

    (Faculty for Entrepreneurship GEA College Ljubljana, Slovenia)

  • Oplotnik Žan Jan

    (Faculty of Economics and Business University of Maribor Maribor, Slovenia)

Abstract
Many economic reforms in developing economies are, in fact, price deregulation in the product markets and trade liberalisation, concerning whether the growth of exports accelerates. This paper, however, attempts to offer a new flavour in the policy reforms using fixed price model to study the growth impact of different sectoral investments and transfers to households. We used Social Accounting Matrix (SAM) multipliers to analyse the flow structure and distributional effects of sectoral investments and transfers in a typical developing economy. Using the case of Nepal we simulate the effects of additional demand creations to sectors and transfer earning growth to households and measure their effects and conclude that in the given flow structure, the additional sector demand and transfer growth in the economy benefit the middle income groups more; whereas the benefit to the poorest is only modest. We examine the effects of potential pro-poor economic restructuring measures especially with regard to the improvements of efficiency parameters and redirection of factor endowments. Consequently, poor households transfer towards those activities which have higher multiplier effects of additional demand and transfer earning. Furthermore, redirection of factor endowments requires undergoing with the skill upgrade of poor labour to be conducive with higher economic growth.

Suggested Citation

  • Acharya Sanjaya & Signorelli Marcello & Vojinovic Borut & Oplotnik Žan Jan, 2013. "Alternative Approach to Economic Restructuring to Benefit the Poor – Sam Multipliers Analysis as Alternative Approach," Scientific Annals of Economics and Business, Sciendo, vol. 60(1), pages 182-201, July.
    • Handle: RePEc:vrs:aicuec:v:60:y:2013:i:1:p:182-201:n:16
    DOI: 10.2478/aicue-2013-0016
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    References listed on IDEAS

    as
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