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Economic implications of foreign exchange rationing in Ethiopia

Author

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

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 A., 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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    File URL: https://hdl.handle.net/10568/162063
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    Cited by:

    1. 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.
    2. Paul Dorosh & Hashim Ahmed, . "Foreign Exchange Rationing and Wheat Markets in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 20(2).
    3. 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.
    4. 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.
    5. 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).
    6. Yami, Mesay & Meyer, Ferdi & Hassan, Rashid, 2017. "Testing price leadership in major regional maize markets in Ethiopia: implications for targeted market intervention," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 56(2), March.
    7. Díaz-Bonilla, Eugenio, 2016. "Volatile volatility: Conceptual and measurement issues related to price trends and volatility," IFPRI discussion papers 1505, International Food Policy Research Institute (IFPRI).
    8. Mohammed Yimam Ali & Ahmed Mohammed Yimer & Tsadiku Setegn Dessie, 2024. "An empirical estimation of aggregate import demand under foreign exchange constraints: Evidence from Ethiopia," PLOS ONE, Public Library of Science, vol. 19(6), pages 1-15, June.
    9. 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).
    10. repec:fpr:ifprib:9780812245295 is not listed on IDEAS
    11. Dorosh, Paul A., 2012. "The evolving role of agriculture in Ethiopia's economic development," IFPRI book chapters, in: Food and agriculture in Ethiopia: Progress and policy challenges, chapter 11, International Food Policy Research Institute (IFPRI).
    12. Renkow, Mitch & Slade, Roger, 2013. "An assessment of IFPRI's work in Ethiopia 1995-2010: Ideology, influence, and idiosyncrasy," Impact assessments 36, International Food Policy Research Institute (IFPRI).

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    JEL classification:

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

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