Analysis of economic Growth, income Distribution and Poverty\ in Ethiopia using CGE Model

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This paper present the nature of the links between economic growth ,poverty and income distribution a central question to the study of economics development. The model adapted was the simple non- dynamic commutable general equilibrium (CGE) model development by international food police research institute (IFPR) and those used by cogenean and robilliard. CGE model takes into account market interaction , that is the effects of pricing outcome of one market in other markets, and its effects, in turn ,creating ripples throughout the whole economy ,perhaps even to the extent of affecting the price –quantity equilibrium in the original market. The underlying social accounting matrix SAM). Which provides initial values for variables and parameters in the model is taken from Alemayheu and Tadele ‘s 1999 SAM . given the limitation of CGE models , econometric estimations is carried out to handle the households agricultural production function using the Ethiopian rural households survey (ERHS) .to explore the impact of an increasing agriculture productivity poverty and inequality simulation exercises are performed. Then the mean income elasticity of the foster- Greer-Theorbeck (FGT)poverty indices are estimated to examine its poverty impact Inequality effects are explored by estimating Gini index for rural and urban households by using the generalized quadratic (Go) Loren z curve.



Computable general equilibrium CGE ,growth, poverty inequality