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Economic implications of foreign exchange rationing in Ethiopia

Author

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  • Dorosh, Paul A.
  • Robinson, Sherman
  • Ahmed, Hashim

Abstract

This paper examines macro-economic developments in Ethiopia between 2004/05 and 2008/09, focusing on the external accounts and the real exchange rate. Simulations using a Computable General Equilibrium (CGE) model of Ethiopia's economy show that, compared to a policy of foreign exchange rationing, a policy of real exchange rate depreciation and no rationing improves economic efficiency and welfare of all households except those who receive the rents (excess profits) arising from rationing.

Suggested Citation

  • Dorosh, Paul A. & Robinson, Sherman & Ahmed, Hashim, 2009. "Economic implications of foreign exchange rationing in Ethiopia," ESSP research notes 3, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:essprn:3
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    References listed on IDEAS

    as
    1. Dorosh, Paul A. & Sahn, David E., 2000. "A General Equilibrium Analysis of the Effect of Macroeconomic Adjustment on Poverty in Africa," Journal of Policy Modeling, Elsevier, vol. 22(6), pages 753-776, November.
    2. Dorosh, Paul A. & Thurlow, James, 2009. "Implications of accelerated agricultural growth on household incomes and poverty in Ethiopia," ESSP research notes 2, International Food Policy Research Institute (IFPRI).
    3. repec:fpr:esspwp:2 is not listed on IDEAS
    4. Löfgren, Hans & Harris, Rebecca Lee & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
    5. Dorosh, Paul A. & Thurlow, James, 2009. "Implications of accelerated agricultural growth on household incomes and poverty in Ethiopia: A general equilibrium analysis," ESSP discussion papers 2, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ansah, Isaac Gershon & Gardebroek, Cornelis & Ihle, Rico & Jaleta, Moti, 2014. "Analyzing Developing Country Market Integration with Incomplete Price Data Using Cluster Analysis," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197169, International Agricultural Trade Research Consortium.
    2. Ansah, Isaac Gershon K. & Gardebroek, Cornelis & Ihle, Rico & Jaleta, Moti, 2016. "Got data too poor for time series analysis? Can cluster analysis be a remedy? Studying wheat market integration in Ethiopia," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246442, African Association of Agricultural Economists (AAAE).
    3. SENBETA, Sisay Regassa, 2013. "Foreign exchange constraints and macroeconomic dynamics in a small open economy," Working Papers 2013023, University of Antwerp, Faculty of Business and Economics.
    4. Yami, Mesay & Meyer, Ferdi & Hassan, Rashid, 2016. "Testing price leadership role in major regional maize markets in Ethiopia," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249439, African Association of Agricultural Economists (AAAE).
    5. Dorosh, Paul A., 2012. "The evolving role of agriculture in Ethiopia's economic development," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.), Food and agriculture in Ethiopia: Progress and policy challenges, chapter 11, International Food Policy Research Institute (IFPRI).
    6. Dorosh, Paul A. & Rashid, Shahidur, 2012. "Food and agriculture in Ethiopia: Progress and policy challenges," IFPRI books, International Food Policy Research Institute (IFPRI), number 978-0-81224-529-5 edited by Dorosh, Paul A. & Rashid, Shahidur.
    7. Paul Dorosh & Hashim Ahmed, 2012. "Foreign Exchange Rationing and Wheat Markets in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 20(2), December.
    8. Ansah, Isaac & Gardebroek, Cornelis & Ihle, Rico & Jaleta, Moti, 2015. "Analyzing Developing Country Market Integration using Incomplete Price Data and Cluster Analysis," 2015 Conference, August 9-14, 2015, Milan, Italy 210954, International Association of Agricultural Economists.

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    More about this item

    Keywords

    foreign exchange rationing; Computable General Equilibrium (CGE) model; foreign exchange controls; Prices; economic growth; import rationing; Agriculture; economic welfare; Development strategies; Globalization; Markets;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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