Trade Liberalization Inequality And Poverty In Ethiopia A Dynamic Computable General Equilibrium Microsimulation Analysis

This study examines the short run and long run impacts of unilateral trade liberalization, in termsrnof' a complete and instantaneous import tariff removal, on sectors of the ethiopian economy andrnhousehold poverty and inequality, The study utilized a dynamic sequential model employing a top-downrnapproach to carry out the microsimulaton analysis of poverty and inequality we used WB SAM of 1999/2000 and CSA household survey of 1999/2000 that comprises of 17332 households.rnThe main findings of the analysis are complete and instantaneous tariff removal in the Ethiopian economy rnwould lead to a worsening of poverty in the short run, and contraction of the initially protected industry. rnParticularly industry and services. In the long run trade liberalization combined with capital accumulationrnreduces poverty and swells sectors that were contrasted in the short run the growth effect captured by the rnmodel contributes to the expansion of all sectors, particularly agriculture and reduces poverty, the decomposition of changes in poverty indicates growth is pro-poor.

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