Estiphanos, Girma (PhD)Ghebremedhin, Zelealem2018-12-102023-11-042018-12-102023-11-042018-07http://etd.aau.edu.et/handle/123456789/15050This study tries to investigate the impact of capital accumulation and macro stability on economic growth of Ethiopia taking a series of data range from 1971 to 2006. Result of co-integration test using Johanson likelihood approach indicates that all explanatory variables which are entered in the model form long-run equilibrium. The study is also conducted test for weak exogeneity and test for zero restrictions on co-integrating vectors to determine causality relationship and level of significance among equilibrium established variables. The result indicated that real GDP positively and strongly associated with physical capital, but negatively and significantly with budget deficit and political instabilities. The study could not find strong evidence which supports the existence of macro instability in the long-run other than short-run impact. The existence of war as indicator of political instability, adversely affects real GDP both in the long-run and short-run. In Ethiopia context, physical capital is found to be more important than human capital probably due to lesser human capital are accumulated in the stock.enEconomic Growth, Capital AccumulationThesis