Economics

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Browsing Economics by Author "A., Elias"

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    The Effect of Depreciation of Birr on Major Export Products of Ethiopia: The Case of Hides and Skins
    (Addis Ababa University, 2011-06) A., Elias; Estifanos, Girma (PhD)
    The paper analyses the effects of trade and exchange rate policies on one of Ethiopia’s agricultural export item, hides and skins. The problem which motivated this study is the theoretical debates and empirical contradictions given on the matter of effect of devaluation/depreciation of domestic currency on the performance of export of the country. Ethiopia, as one of the most endowed in enormous capacity in livestock population, it is a potential advantage to the country to be a country with higher competitive advantage in the sub sector of export of hides and skins. But the reality is the exact opposite. The country at the head in livestock population is at the tail of world exporters of hides and skins. one of the policy measures taken by the government in the last couple of decades in order to improve the level of export of the country in general is devaluation (and continuous depreciation) of birr. The step towards market based determination of exchange rate is intended to give an enhanced performance of exports especially in sectors which the country has great potentials. Therefore, the study asks and answers what happened in the export of hides and skins when the exchange rate depreciates continuously for the last 17 years. The empirical findings of the study reveal that real exchange rate is one factor, among many others, that affects the volume of export of hides and skins. Hence, it is recommended that policy towards liberalized exchange rate determination should be complement by other policy measures which are in harmony with the economic agenda of export enhancement.