IDEAS home Printed from https://ideas.repec.org/a/ags/eeaeje/249605.html
   My bibliography  Save this article

Economic Implications of Foreign Exchange Rationing in Ethiopia

Author

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

Abstract

Increases in foreign transfers and capital inflows helped spur Ethiopia’s economic growth in recent years, but also contributed to a real exchange rate appreciation that reduced incentives for production of tradable goods. Then, beginning in March 2008, following major external shocks, foreign exchange for imports was restricted to avoid excessive drawdown of reserves. This paper examines the implications of these shocks and policies using a Computable General Equilibrium (CGE) model of the Ethiopian economy. The results show that there are substantial costs to both foreign exchange rationing and real exchange rate appreciation in terms of economic efficiency and income distribution.

Suggested Citation

  • Dorosh, Paul & Robinson, Sherman & Hashim, Ahmed, 2009. "Economic Implications of Foreign Exchange Rationing in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 18(2), pages 132-132, August.
    • Handle: RePEc:ags:eeaeje:249605
    DOI: 10.22004/ag.econ.249605
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/249605/files/Paul%20Dorosh_%20Sherman%20Robinson%20and%20Hashim%20Ahmed_Economic%20Implications%20of%20Foreign%20Exchange%20Rationing%20in%20Ethiopia.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.249605?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:fpr:esspwp:2 is not listed on IDEAS
    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. Dorosh, Paul A. & Dradri, Simon & Haggblade, Steven, 2009. "Regional trade, government policy and food security: Recent evidence from Zambia," Food Policy, Elsevier, vol. 34(4), pages 350-366, August.
    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. & 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.
    6. Unknown, 2001. "General Discussion," Proceedings of the 6th Agricultural and Food Policy Systems Information Workshop, 2000: Trade Liberalization Under NAFTA: Report Card on Agriculture 16839, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    7. 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

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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).
    2. 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.
    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. 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. 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. 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.
    9. Paul Dorosh & Hashim Ahmed, 2012. "Foreign Exchange Rationing and Wheat Markets in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 20(2), December.
    10. 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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lofgren, Hans & Robinson, Sherman & Thurlow, James, 2003. "Copper Crisis And Agricultural Renaissance In Zambia: An Economy-Wide Analysis," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25805, International Association of Agricultural Economists.
    2. Calvin Z. Djiofack & Eric W. Djimeu & Matthieu Boussichas, 2014. "Editor's choice Impact of Qualified Worker Emigration on Poverty: A Macro–Micro-Simulation Approach for an African Economy," Journal of African Economies, Centre for the Study of African Economies, vol. 23(1), pages 1-52.
    3. Arndt, Channing, 2006. "HIV/AIDS, human capital, and economic growth prospects for Mozambique," Journal of Policy Modeling, Elsevier, vol. 28(5), pages 477-489, July.
    4. Wobst, Peter, 2002. "The impact of domestic and global trade liberalization on five Southern African countries," TMD discussion papers 92, International Food Policy Research Institute (IFPRI).
    5. Channing Arndt & Sherman Robinson & Finn Tarp, 2006. "Trade Reform and Gender in Mozambique," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 73-89.
    6. Thurlow, James, 2002. "Can South Africa afford to become Africa's first welfare state?," FCND discussion papers 139, International Food Policy Research Institute (IFPRI).
    7. Go, Delfin S. & Kearney, Marna & Robinson, Sherman & Thierfelder, Karen, 2004. "An Analysis of South Africa's Value Added Tax," Conference papers 331274, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Strzepek, Kenneth M. & Yohe, Gary W. & Tol, Richard S.J. & Rosegrant, Mark W., 2008. "The value of the high Aswan Dam to the Egyptian economy," Ecological Economics, Elsevier, vol. 66(1), pages 117-126, May.
    9. Riccardo Magnani & Luca Piccoli & Martine Carré & Amedeo Spadaro, 2013. "Would a euro's depreciation improve the French economy?," Working Papers hal-01515823, HAL.
    10. World Bank, 2002. "Romania - Building Institutions for Public Expenditure Management : Reforms, Efficiency and Equity - A Public Expenditure and Institutions Review," World Bank Publications - Reports 15371, The World Bank Group.
    11. María Inés Terra & Alvaro Forteza & Gabriel Katz & Andrés Pereyra, 2005. "Macroeconomic impacts of the reform of public services in Uruguay - A CGE analysis," Documentos de Trabajo (working papers) 2105, Department of Economics - dECON.
    12. Winter, Etti Maria & Frohberg, Klaus, 2005. "Properties of Flexible Functional Forms for Modeling Bilateral Export Supply and Import Demand in Multi-Country Agri-Food Models," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24471, European Association of Agricultural Economists.
    13. Nwachukwu, Jacinta, 2011. "Halving poverty in HIPC countries by 2015: How costly if achievable?," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 213-225, March.
    14. Diao, Xinshen & Fan, Shenggen & Zhang, Xiaobo, 2002. "How China's WTO accession affects rural economy in the less-developed regions: A multi-region, general equilibrium analysis," TMD discussion papers 87, International Food Policy Research Institute (IFPRI).
    15. Nin Pratt, A. & Bonnet, P. & Jabbar, Mohammad A. & Ehui, Simeon K. & de Haan, C., 2005. "Benefits and cost of compliance of compliance of sanitary regulations in livestock markets: the case of Rift valley Fever in the Somali Region of Ethiopia," Research Reports 182867, International Livestock Research Institute.
    16. Arndt, Channing & Wobst, Peter, 2002. "HIV/AIDS and labor markets in Tanzania," TMD discussion papers 102, International Food Policy Research Institute (IFPRI).
    17. Löfgren, Hans & Robinson, Sherman & Thurlow, James, 2002. "Macro and micro effects of recent and potential shocks to copper mining in Zambia," TMD discussion papers 99, International Food Policy Research Institute (IFPRI).
    18. Vos, R.P. & Ganuza, E. & Morley, S. & Robinson, S. & Pineiro, V., 2004. "Are export promotion and trade liberalization good for Latin America's poor? : a comparative macro-micro CGE analysis," ISS Working Papers - General Series 19158, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    19. Diao, Xinshen & Nwafor, Manson & Alpuerto, Vida & Akramov, Kamiljon & Salau, Sheu, 2010. "Agricultural growth and investment options for poverty reduction in Nigeria," IFPRI discussion papers 954, International Food Policy Research Institute (IFPRI).
    20. Diao, Xinshen & Hazell, Peter & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Financial Economics;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eeaeje:249605. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eeaa2ea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.