ABSTRACT
Winters (2002) provides a conceptual framework with which to trace the links between trade shocks, including trade liberalisation, and household poverty. The Winters framework is predicated on the view that, while in the long run the critical causal link is economic growth, in the short run one needs to consider links via the product and labour markets and government revenue, considering both short-term adjustment issues and medium-term secular changes. The framework has figured in several subsequent discussions of trade and poverty but has so far received virtually no formal empirical application and testing. Although it is difficult to isolate the effects of trade shocks from those of other shocks and to attribute changes in the economy solely to trade liberalisation, this chapter addresses this absence.
