Centro de Investigaciones Económicas - CINVE

Assessing the impact of the global financial and economic crisis in developing countries: the case of Uruguay.
    • 10/2011

    Carmen Estrades y Cecilia Llambí. PEP MPIA Working Paper No. 2011-16.

    This paper uses a static computable general equilibrium model (CGE) linked to a microsimulation model to analyze how the global crisis and some adopted policy responses may have affected the Uruguayan economy. The focus is on the trade channel and foreign capital flows, since they are the most important mechanisms through which the global crisis affected the Uruguayan economy. The crisis had a strong impact on exports and fixed investment. Poorest households would be the most affected, as they face a stronger reduction in real wages and a rise in unemployment. A policy based in increasing current public consumption does moderately counteract some negative impacts of the crisis, but benefits mainly skilled workers, and does not act directly towards the most affected.