Devaluation and Tax Reform Boost Kenyan Exports, Reduce Poverty
The study looked at how changing economic policies in Kenya could impact poverty and competitiveness. By using a computer model, they found that a 10% devaluation of the currency, along with a fairer tax system and removing certain taxes on industries, could help the poor. This would also lead to a big increase in the country's GDP, boost exports (especially in agriculture), improve the balance of payments, and keep investments and government spending stable. The results varied depending on whether they assumed there was a lot of available workers or if wages were set by the market.