Abadi, Taddesse(Dr.)Berhanu, Andualem2021-07-222023-11-042021-07-222023-11-041996-06http://etd.aau.edu.et/handle/123456789/27309Based on ERHS data, the study used two-step dynamic nonlinear panel data model to analyze poverty dynamics, the implication of shocks and informal risk sharing strategies on poverty dynamics. The model better explains the dynamic process of rural poverty in Ethiopia, which reveals the existence of true state dependence. Size of land owned, number of oxen, male headship and higher educational attainments reduces the risk of poverty. Only drought s’= Ock and death experienced betweenI977-1983 E.C. have long-term impact on poverty dynamics, whereas the impact of idiosyncratic shocks is wiped-out shortly. Many of informal risk sharing strategies significantly reduce current poverty. But in the long-tem receiving remittance and food gift prolongs poverty. While lending to others and membership in Eqqub have poverty reducing impact both currently and in the long-tem.enBehaviours and DynamicsReal Exchange RatesThesis