Browsing by Author "Berga Helen"

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    Exchange Rate Pass-Through to Import and Consumer Prices: Evidence from Ethiopia
    (Addis Ababa University, 2012-06) Berga Helen; Admassie Assefa
    Exchange Rate Pass-Through to Import and Consumer Prices: Evidence from Ethiopia Helen Berga Addis Ababa University, 2012 The fact that Ethiopia adopted managed floating exchange rate policy since 1992 as well as various trade reform measures taken makes the country’s import and consumer prices susceptible to the effects of exchange rate movements. Thus, the study investigates the degree of ERPT and its asymmetry to import and consumer prices in Ethiopia between 1991/92 and 2010/11 using two types of VAR models (SVAR and CVAR). Based on SVAR analysis the paper found that ERPT in Ethiopia during the period under review is moderate, significant and persistent in the case of import price and low and short lived in the case of consumer prices. The cointegration analysis shows incomplete ERPT to import price and absence of pass-through to consumer price in the long run. The result obtained from the asymmetric model suggests that ERPT to import prices is higher in periods of Birr depreciation than appreciation. Also, pass-through to import prices is found to be higher in periods of small changes than large changes in the exchange rate. The study also tries to get pass-through estimates in different inflation environments in order to test Taylor’s hypothesis. However, no evidence is found which supports the hypothesis in the case of Ethiopia. The fact that ERPT was found to be incomplete has useful implication to policymakers, especially in the design and implementation of exchange rate and monetary policy.
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    Exchange Rate Pass-through to Import and Consumer Prices: Evidence from Ethiopia
    (Addis Ababa University, 2012-06) Berga Helen; Admassie Assefa
    The fact that Ethiopia adopted managed floating exchange rate policy since 1992 as well as various trade reform measures taken makes the country’s import and consumer prices susceptible to the effects of exchange rate movements. Thus, the study investigates the degree of ERPT and its asymmetry to import and consumer prices in Ethiopia between 1991/92 and 2010/11 using two types of VAR models (SVAR and CVAR). Based on SVAR analysis the paper found that ERPT in Ethiopia during the period under review is moderate, significant and persistent in the case of import price and low and short lived in the case of consumer prices. The cointegration analysis shows incomplete ERPT to import price and absence of pass-through to consumer price in the long run. The result obtained from the asymmetric model suggests that ERPT to import prices is higher in periods of Birr depreciation than appreciation. Also, pass-through to import prices is found to be higher in periods of small changes than large changes in the exchange rate. The study also tries to get pass-through estimates in different inflation environments in order to test Taylor’s hypothesis. However, no evidence is found which supports the hypothesis in the case of Ethiopia. The fact that ERPT was found to be incomplete has useful implication to policymakers, especially in the design and implementation of exchange rate and monetary policy.
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    The Impact of Trade Liberalization on the Economic Growth of Ethiopia
    (A.A.U, 2021-09) Ashine Zebider; Berga Helen
    Trade liberalization is the removal or reduction of restrictions on the free exchange of goods and service between nations. These barriers could be tariffs and nontariff which includes; duties, surcharges, licensing rules and quotas. Trade liberalization is a debatable topic. The empirical research analyses the impacts of trade liberalization on Ethiopia economic growth using annual time series data from 1990-2020 by employing VEC model to estimate the long run relationship between trade liberalization and economic growth in the country during the study period. The overall findings of this research is that, trade liberalization have positive and significant long run impact on economic growth of Ethiopia while its short run impact is insignificant. Therefore, the government has to promote more liberal forms of trade policy in order to enhance the economic growth rate of the country. However, doing so without introducing appropriate complementary policies, trade reform alone cannot serve as a magic solution to economic growth. Keywords: Trade Liberalization, Economic Growth, Ethiopia, Vector Error Correction Model