Browsing by Author "Kebede, Alekaw"

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    Effects of Tariff Reduction and Tax Replacements on Growth, Poverty And Income Distribution in Ethiopia: A CGE-Microsimulation Analysis
    (Addis Ababa University, 2011-06) Kebede, Alekaw; Ferede, Tadele (PhD)
    This study utilizes a 15-sector static CGE model of International Food Policy Research Institute for Ethiopian economy. The study also used the Distributive Analysis (DAD) software to compute poverty and inequality indicators. Increasing domestic tax rates (that is, replacing the tariff revenue lost with either direct tax or indirect tax) increased exports of most agricultural commodities and industrial imports causing the domestic industries to contract in production and employment. Effects on GDP, consumer’s welfare, factor rewards, poverty and income distribution are mixed. Replacing tariff by direct tax improved all these variables marginally by increasing changes in factor rewards and decreasing the price level (CPI). On the other hand, replacing tariff by indirect tax has worsening effect by deteriorating the changes in factor rewards and increasing the relative prices (CPI).