The Contribution of Major Export Commodities of Ethiopia to the Volatility of the Country's Export Earnings
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Date
2009-05
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A.A.U
Abstract
Ethiopian export, like many other developing countries, is limited to. few primary proudest that
are mainly agricultural. Studies show that such commodity concentration could res lilt in
instability of export earnings which in turn will fleet growth and capital formation, since these
countries highly depend on earnings from the export sector for' there imports of capital and
consumption goods. it is argued that volatility of such proceeds will significantly influence out put
by cons twining input and production planning The classical approach to measure instability, •
and identify its causes was using a cross-country regression, which has its own limitation such
the unrealistic inherent assumption of economic similarities of the countries in the sample as will
as limited use when it comes to country specific policy decisions. the present study analyzes
Ethiopia's export earnings instability by employing minty specific time series models which
will take advantage of the sufficiently large sample period, form 1992 to 2008 the study
identifies the contributions of major agricultural export commodities, namely coffee. hides and
skins, oilseed and fruits and vegetables. attempts have also been made to make comparisons
between the periods of the Imperial, Dreg and Post dreg periods as theses periods saw major
shifts in terms of trade policies. The study finds that the post-drag period is characterized by
increase both in the instability and diversification of exports. this calls for reconsideration
policy recommendations which subscribe diversification to trial instability
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Keywords
Country's Export, Export Commodities