Agriculture and economic growth in Ethiopia: growth multipliers from a four-sector simulation model
Agriculture accounts for over half of Ethiopian GDP, yet the case for agriculture as a focus of economic growth strategies must rely on identifying a set of intersectoral linkages through which agricultural growth contributes to the growth of nonagriculture in the Ethiopian economy. This article develops a four-sector numerical simulation model of economic growth in Ethiopia which permits the calculation of macroeconomic growth multipliers resulting from income shocks to agriculture, services, modern industry, and traditional industry. The resulting growth multipliers are 1.54 for agriculture, 1.80 for services, 1.34 for modern industry, and 1.22 for traditional industry. These results depict an economy in which intersectoral linkages operate on a highly uneven basis. These limits are reflected in the wide disparity between sectoral growth multipliers and by substantial differences in the patterns of their decomposition. The policy relevance of these findings relate, in part, to the distributional implications of growth in particular sectors. Poverty in Ethiopia is disproportionately rural. An income shock to agriculture is clearly the most progressive choice, indicating the need to highlight agricultural development in growth strategies for Ethiopia. Yet, the simulation results further indicate that doing so imposes relatively little trade off against total benefit. While a $1 service sector income shock generates $0.80 in indirect benefits, a $1 agricultural income shock still generates $0.54 in indirect gains - a somewhat smaller benefit, bnt one likely to make the greatest possible impact on poverty reduction. © 1999 Elsevier Science B.V. All rights reserved.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Haggblade, Steven & Hazell, Peter B. & Brown, James, 1988.
"Farm-nonfarm linkages in rural sub-Saharan Africa,"
Policy Research Working Paper Series
6, The World Bank.
- Haggblade, Steven & Hazell, Peter, 1989. "Agricultural Technology and Farm-Nonfarm Growth Linkages," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 3(4), December.
- Lewis, Blane D. & Thorbecke, Erik, 1992. "District-level economic linkages in Kenya: Evidence based on a small regional social accounting matrix," World Development, Elsevier, vol. 20(6), pages 881-897, June.
- Haggblade, Steven & Hazell, Peter, 1989. "Agricultural technology and farm-nonfarm growth linkages," Agricultural Economics, Blackwell, vol. 3(4), pages 345-364, December.
When requesting a correction, please mention this item's handle: RePEc:eee:agecon:v:20:y:1999:i:3:p:241-252. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.