Demeke, Mulat (Dr)Chane, Seyoum2021-06-172023-11-042021-06-172023-11-041996-05http://etd.aau.edu.et/handle/123456789/26886An assessment of the Ethiopian economy indicates poor performance of the commodity producing sector most notably agriculture, low domestic sayings, weak private investment, extremely low foreign investment inflow, deterioration of living standards, unemployment and poor social and physical infrastructure. This paper looks into the performance of the Ethiopian economy over the period 1971172- 1994/95. Looking into the empirical determinants of the Ethiopian economic growth (or the likely causes of the inadequate long term record growth) during 1968-1995 the result indicates that growth of population, share of government consumption to GDP, and growth in money supply affect GDP per capita growth negatively. Variables as lagged ratio of agricultural output to real GDP, real export growth, percentage change in real effective exchange rate, and share of real trade balance in real GDP on economic growth are found to be a significant contributing factors for the economic growth. In contrast growth of capital formation (substantially dominated by government investment), and human capital showed no evidence that explains at least the poor growth performance, which may be attributed to the measurement problems. The paper further concludes that the specification for testing the possible export growth nexus through its direct and beneficial externality effects on the rest of the economy has shown no evidence and has no satisfactory explanatory power. It follows that policies that favorably affect the agricultural sector; reduce government consumption (with out reducing government investment); maintain external competitiveness; improve real effective exchange rate; create conducive environment for private sector investment, foreign capital inflow, and export diversification; slow population growth, and encourage human capital development are found to be importantenGrowth DeterminantsEconomic PerformanceThesis