The Impact of Trade on Poverty in Ethiopia: A Sequential Dynamic Computable General Equilibrium Micro Simulation Analysis
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Date
2012-06
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A.A.U
Abstract
This study tries to address the impact of trade on poverty by way of agricultural total factor
Productivity (FFP). In doing so, we employ a Sequential Dynamic Commutable General
Equilibrium Model linked to a Micro Simulation Model. We also used econometric model to
Estimate the agricultural TFP of Ethiopia. For these purpose, we utilized the data of the 2005/06
SAM of EDRI (Ethiopian Development Research Institute), the 2004/05 HICE (Household
Income Consumption Expenditure) survey conducted by CSA (Central Statistical Agency of
Ethiopia), different years of agricultural sample surveys of CSA and the ITC UNCTAD data.
The estimation results of this study shows that trade openness and fertilizer application have
Positive impact on agricultural TFP. But seeds, irrigation and extension have negative impact on
Agricultural TFP. We also found that the proposed tariff cut, trade induced agricultural TFP
and improved agricultural TFP due the application of fertilizer results in an increment in all
Macroeconomic variables. However, poverty due to trade openness and tariff reduction
Exacerbate poverty during the simulation period.
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Keywords
Trade Openness, Agricultural TFP, Dynamic CGE, Poverty, Ethiopia