The Contribution of Major Export Commodities of Ethiopia to the Volatility of the Country's Export Earnings

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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



Country's Export, Export Commodities