Export Performance of Agricultural, Food Commodities and Economic Growth in Ethiopia: Using Co-Integration Approach
Résumé
The agricultural and export performance of the country determine the Economic growth in Ethiopia. However, Agricultural export performance, granger causality with GDP, labor and capital, the short run and long run dynamic relationship among the variables is not well studied, documented and updated. Therefore, the study aimed to examine influence of agriculture, trade, labour and capital to the economic growth. The analytical procedure applied were Engle-Granger for causality, Johansen Approach for co-integration and error-correction model. The results indicated that in the long run Ethiopian economic growth defined as positive function of agricultural exports, imports and capital, while population negatively affect the growth. In the short run, lagged gross domestic product explained positively the economic growth, while the agricultural imports, capital and population size influenced negatively. The result implied that the correction in one period draws back to the other period at speed of 41%. Therefore, diversifications, adopting labor intensive industries and improvement in fixed capital formation were policy directions that can stimulate growth of Ethiopia Economy.
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