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Three interconnected crises - of the global financial system, food security and global warming - potentially threaten peace and stability. Multilateral action must be combined with a clearer understanding of how they affect each other and their regional and country level impacts.The world is going through a 'Triple Crisis'. The impact of the financial crisis has been deep, its effects are far from over, and recent signs of recovery remain tentative, at best. At the same time, over one billion people face hunger, and any recovery in the global economy will once again push up food prices, leading to another spike that will hit the poor hard. If global economic growth does recover, then emissions of greenhouse gases will accelerate once again, while land that previously grew food is now being turned over to biofuel crops, adding to the pressure on global food prices. These crises interact, they demand coordinated solutions, and they potentially threaten peace and stability. Hence our use of the term: the Triple Crisis.

In a recent article, Nowak-Lehmann, Dreher, Herzer, Klasen, and Martínez-Zarzoso (2012) (henceforth NDHKM) conclude that foreign aid has not had a significant effect on income, based on evidence from panel data potentially covering 131 countries over the period 1960-2006. The present study provides a replication of the empirical results reported by NDHKM. We uncover that NDHKM relied on a regression model that included a log transformation of variables that are not strictly positive. This led to a non-random omission of a large proportion of observations. Furthermore, we show that NDHKM's use of co-integrated regressions is not a suitable empirical strategy for estimating the causal effect of aid on income. Given the nature of the variables and the question under investigation, a Vector Autoregressive (VAR) model can arguably better address the inherent endogeneity problem in the aid-growth relationship. Evidence from a panel VAR model estimated on the dataset of NDHKM, suggests a positive and statistically significant long-run effect of aid on income.

Reducing poverty and inequality and promoting inclusive growth are fundamental to achieving the United Nations Sustainable Development Goals. Much has changed in the global economy in recent decades and perspectives on progress made vary widely. This is even more so in light of the ongoing COVID-19 pandemic. However, getting to grips in a meaningful manner with existing trends is critical to evidence-based policy-making. This contribution aims to provide an original review and evaluation of the main stylized facts concerning poverty, inequality, and growth. It will uncover existing trends, put controversies into perspective, and help to provide a platform for informed policy debate.

We provide a comprehensive approach for analyzing the evolution of poverty using Mozambique as a case study. Bringing together data from disparate sources, we develop a novel “back-casting” framework that links a dynamic computable general equilibrium model to a micro-simulation poverty module. This framework provides a new approach to explaining and decomposing the evolution of poverty, as well as to examining rigorously the coherence between poverty, economic growth, and inequality outcomes. Finally, various simple but useful and rarely-applied approaches to considering regional changes in poverty rates are presented.

The authors calibrate two static computable general-equilibrium (CGE) models with 16 and 5999 representative households. Aggregated and disaggregated household categories are consistently embedded in a 2000 social accounting matrix (SAM) for Vietnam, mapping on a one-to-one basis. Distinct differences in poverty assessments emerge when the impact of trade liberalization is analyzed in the two models. This highlights the importance of modeling micro-household behavior and related income and expenditure distributions endogenously within a static CGE model framework. The simulations indicate that poverty will rise following a revenue-neutral lowering of trade taxes. This is interpreted as a worst-case scenario, which suggests that the government should be proactive in combining trade liberalization measures with a pro-poor fiscal response to avoid increasing poverty in the short to medium term.