The financial crisis of 2008-09 hasconsiderably slowed the pace of economic growth in Mongolia.When combined with the Dzud (severe winter storm) of2009-10, which occurred just as the economy was beginning torecover and killed over one million heads of livestock, theslowdown is likely to have significant impacts on poverty aswell as the distribution of income and consumption among thepoor and non-poor. In this paper we examine the poverty anddistributional impacts of the crisis in Mongolia, relying onpredictions from a simulation model based on pre-crisisdata, given that household data to measure impacts duringand after the crisis is unavailable. It is difficult topredict the distributional impacts of the financial crisiswith a high degree of confidence. Evidence from previouscrises suggests that relative inequality falls about asoften as it rises during aggregate contractions (Paci et al,2008). Furthermore, as the crisis spreads within a country(through adjustments in domestic credit and labor marketsand fiscal policies), its impacts across different groups,sectors or areas became all the more difficult to track. Thepaper is structured as follows. Section two outlines thebasic methodological approach used to create the simulationresults used here. Section three discusses the macroeconomicprojections that are used as inputs into the model. Sectionsfour and five examine the model's projections forpoverty and distributional impacts respectively, section sixdiscusses the impact of Dzud (severe winter) and sectionseven concludes.
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