Development Economics

Permanent URI for this collection

http://etd.aau.edu.et/handle/123456789/39

Browse

Browsing Development Economics by Subject "ARDL"

Now showing 1 - 2 of 2
  • No Thumbnail Available
    Item
    The Impact of Institutional Quality on Income Inequality: Comparative Economic Analysis of Ethiopia and Uganda
    (Addis Ababa University, 2021-01) Tafere, Norahun; Lechisa, Gidisa (PhD)
    Income inequality is currently a global issue since the gap between the rich and poor people within countries has been rising and it is one of the causes for polarizing societies as well as affects social cohesion among the society in a country. While there are various causes for the observed income inequality globally, there is still an acceptable suggestion that rising income inequality can be controlled by improving the quality of existing institutions. The main purpose of this paper is to explore the impact of institutional quality on income inequality in the case of Ethiopia and Uganda. The study uses time series annual data from 1991 to 2019, and an effort is made to identify the short run and long run impacts of institutional quality on income inequality in Ethiopia applying an Autoregressive Distributed Lag (ARDL) and Error Correction Methods (ECM). The findings of the study revealed that voice and accountability and rule of law are affecting income inequality in the long run for Ethiopia, while rule of law and political stability and absence of violence/terrorism has negative effect for Uganda in the long run. The coefficient of the ECM is found with the appropriate sign and magnitude. In general, the findings of the study highlighted that institutional quality has a vital role for income inequality reduction through the instrument on income redistribution from the richest to the poorest segment in both countries.
  • No Thumbnail Available
    Item
    Nexus between Political Instability and Economic Growth in Ethiopia
    (Addis Ababa University, 2021-06) Melesse, Mulugeta; Danu, Berhanu (PhD)
    This study investigates the nexus between political instability and economic growth in Ethiopia for the period of 1991- 2020due to the availability of data. The ARDL, co-integration approach and Error Correction Model are employed to examine the existence of long- run relationship between political instability and economic growth as well as short- run dynamics of economic growth respectively. For investigating the causal relationship among the variables of the model Granger causality test has been applied. The empirical results of the study confirm the existence of cointegration between political instability and economic growth in Ethiopia. Results show that political instability has significant and negative relation with economic growth both in long-run and short-run in general. This paper is relevant for two main reasons. First, it adds to the debate on the effects of political instability on economic growth. Second, it makes an important contribution by focusing on the case of Ethiopia, which has received little attention in the literature on political instability relation with economic growth so far, even though political instability is a constant threat to the country.