Economics

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Browsing Economics by Subject "Accounting Matrix"

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    Economic Linkages and Policy Shocks in Ethiopia: Social Accounting Matrix (SAM)-Based Multiplier Analysis
    (A.A.U, 2000-05) Ferede, Tadele; Geda, Alemayehu (Dr.)
    The objective of this study is to examine .the magnitude of sect oral linkages and the potential impact of policy- induced changes on the Ethiopian economy. To, carry out this, social accounting matrix (SAM)-based multiplier is used. The social accounting matrix consists of fifteen production activities. two factors of production (labor and capital), three institutions, namely, rural households, urban households, and government. one combined capital account, and the rest of the world. This study indicated that the direct interdependence of the Ethiopian economy is limited. When general equilibrium effects are taken into consideration, agriculture is found to be superior, through income and consumption linkages, in terms of stimulating economic growth in the country. Of the industrial sub sectors, food processing. metals, beverage, and textile have strong linkages with the rest of the economy. The study pointed out that targeting rural areas is impo11ant to eliminate rural and urban poverty simultaneously. The study also showed that complete elimination of fertilizer subsidy has brought a decline in sect oral output , household income. and private savings. The study indicated that sect oral investment programmers, particularly investments in agriculture have stimulated sect oral output and household income. It also indicated that increasing coffee exports have substantial impacts on stimulating growth and household II1comes. It follows that to bring long-term development. emphasis should be directed towards the transformation of the rural areas in general and agricultural sector in particular and selective promotion of industrial subsectors. It is also crucial to reconsider the implication of'fel1ilizer subsidy elimination.