Export Instability And Economic Growth In Ethiopia

The study tried to examine the relationship between export earning instability andrneconomic growth in Ethiopia using relatively long time series data; and assessedrnthe political economy factors worsening coffee sector performance and therebyrninstability in the export earnings of the country.rnrnExport earnings instability in many primary commodity producing LDCs has beenrnfound to affect their economies adversely, the positive relationships found inrnsome cases, however, are criticized for their mis-specification of the equation tornbe estimated and the technique used in constructing the instability index.rnThe instability in the export earning analyzed in this paper is found to have anrnadverse effect on the growth of the economy in the short run. The long run effectrnthough happened to be adverse it is so insignificant to affect the economy. Thernpolitical economy assessment gave the vision that the external shocks and badrndomestic policies have resulted in lower farm gate prices thereby the productionrnand export of coffee than would have been if these influential policies weren't inrnaction.

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