Record Details

The balance of payment-constrained economic growth in Ethiopia

The Ethiopian Journal of Business and Economics

View Archive Info
 
 
Field Value
 
Title The balance of payment-constrained economic growth in Ethiopia
 
Creator Anega, NM
 
Subject Economic growth; Balance of payment-constrained growth; Demand-oriented growth.
 
Description The objective of this paper is to empirically test the validity of the simplified version of the balance of payment-constrained economic growth model for Ethiopia during the period 1971-20082. According to the model, economies only grow at a pace allowed by the constraints imposed by the requirement of balance of payment. Import demand function is estimated for the same period in order to estimate income elasticity; co-integration test between GDP and export is conducted using the Engel Granger two step technique3 and the effect of liberalization on import income elasticity is incorporated into the analysis. The finding shows that the average economic growth over the sample period is 2.84 percent, whereas the economic growth as suggested by Thirwall’s law is 7.42 percent. These finding show that Ethiopia’s economy has been growing at a low rate as compared to the model’s predicted growth rate. Achieving persistent and sustainable economic growth depends upon the strategies that relate to institutional and technological progress along with the other significant factors such as sound infrastructure and continuity in policies.Keywords: Economic growth; Balance of payment-constrained growth; Demand-oriented growth.
 
Publisher College of Business and Economics, Addis Ababa University
 
Contributor —
 
Date 2015-01-23
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.ajol.info/index.php/ejbe/article/view/111832
10.4314/ejbe.v1i2.
 
Source Ethiopian Journal of Business and Economics (The); Vol 1, No 2 (2010); 98-127
2410-2393
2311-9772
 
Language eng
 
Relation http://www.ajol.info/index.php/ejbe/article/view/111832/101599