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Title: Analysis of Economic Growth, Income Distribution and Poverty in Ethiopia using Computable General Equilibrium Model
Authors: Ephrem, Israel
Advisors: Dr. Tekie Alemu
Keywords: computable general equilibrium (CGE)
Copyright: 2006
Date Added: 25-May-2008
Publisher: Addis Ababa University
Abstract: This paper presents the nature of the links between economic growth, poverty and income distribution, a central question to the study of economic development. The model adapted was the simple non-dynamic Computable General Equilibrium (CGE) model developed by International Food Policy Research Institute (IFPRI) and those used by Cogneau and Robilliard. CGE model takes into account market interaction, that is, the effects of pricing outcomes of one market in other markets, and its effects, in turn, creating ripples throughout the whole economy, perhaps even to the extent of affecting the price-quantity equilibrium in the original market. The underlying Social Accounting Matrix (SAM), which provides initial values for variables and parameters in the model, is taken from Alemayehu and Tadeles’ 1999 SAM. Given the limitations of CGE models, econometric estimations is carried out to handle the households agricultural production function using the Ethiopian Rural Household Survey (ERHS). To explore the impact of an increasing agricultural productivity on poverty and inequality, simulation exercises are performed. Then, the mean income elasticity of the Foster-Greer-Thorbeck (FGT) poverty indices are estimated to examine its poverty impact. Inequality effects are explored by estimating Gini index for rural and urban households by using the Generalized Quadratic (GQ) Lorenz curve.
Description: A Thesis Submitted to the School of Graduate Studies of Addis Ababa University in Partial Fulfillment of the Requirement for the Degree of Master of Science in Economics Policy Analysis
URI: http://hdl.handle.net/123456789/1227
Appears in:Thesis - Economics

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