Macroeconomic Fluctuations and Poverty

Philip N. Jefferson and Kunhee Kim

in The Oxford Handbook of the Economics of Poverty

Published in print November 2012 | ISBN: 9780195393781
Published online December 2012 | | DOI:

Series: Oxford Handbooks

Macroeconomic Fluctuations and Poverty

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  • Economics
  • Macroeconomics and Monetary Economics
  • Health, Education, and Welfare



This article examines the dynamic relationship between macroeconomic performance and measures of poverty in the United States. The article is organized as follows. Section 2 presents insights on the relationship between poverty and macroeconomic performance that emerge from the literature. The emphasis is on empirical studies from 1986 to 2011. Section 3 provides a snapshot of the change in poverty over National Bureau of Economic Research-dated recessions for a variety of poverty measures. Section 4 uses vector autoregressions (VARs) to characterize the response of poverty to innovations in various social indicators and measures of macroeconomic performance. Section 5 expands the empirical analysis to include alternative measures of poverty—a consumption-based poverty rate constructed by Meyer and Sullivan (2010) and an income-based poverty rate constructed by Broda and colleagues (2009) by using a consumer price index that has been adjusted for substitution and quality bias. Section 6 conducts a forecasting exercise for income poverty and consumption poverty. Section 7 concludes and offers suggestions for future research.

Keywords: macroeconomic performance; poverty measures; recessions; consumption; poverty rates; income poverty

Article.  11486 words. 

Subjects: Economics ; Macroeconomics and Monetary Economics ; Health, Education, and Welfare

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