Decomposing Terms of Trade Fluctuations in Ethiopia
This paper proposes a technique to decompose short-run fluctuations in the terms of trade. Using Ethiopia as an example, we decompose the commodity terms of trade into various components to measure the impact of price and volume shifts as well as export diversification. We use monthly data from the past decade, including periods during the global food and financial crises. Our findings suggest that diversification out of traditional coffee exports to other export commodities successfully mitigated a terms of trade shock. Continued export diversification will be beneficial.
|Date of creation:||08 Oct 2010|
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Boston University - Department of Economics - The Institute for Economic Development Working Papers Series
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IMF Working Papers
00/72, International Monetary Fund.
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- Loening, Josef L. & Durevall, Dick & Birru, Yohannes A., 2009.
"Inflation dynamics and food prices in an agricultural economy : the case of Ethiopia,"
Policy Research Working Paper Series
4969, The World Bank.
- Loening, Josef L. & Durevall, Dick & Ayalew Birru, Yohannes, 2009. "Inflation Dynamics and Food Prices in an Agricultural Economy: The Case of Ethiopia," Working Papers in Economics 347, University of Gothenburg, Department of Economics.
- Blattman, Christopher & Hwang, Jason & Williamson, Jeffrey G., 2007. "Winners and losers in the commodity lottery: The impact of terms of trade growth and volatility in the Periphery 1870-1939," Journal of Development Economics, Elsevier, vol. 82(1), pages 156-179, January.
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