11 research outputs found
The Dynamics between Real Exchange Rate Movements and Trends in Trade Performance: The Case of Ethiopia
Ethiopia’s exchange rate policies have been a bone of contention for concerned economic analysts and commentators alike. This study takes a new look at the record to explore the impact of exchange rate liberalization reforms on export growth in Ethiopia. I employ generalized method of moments estimators (GMM) techniques on time series data for the period 1981-2009. The study does not support the widely held view that exchange rate reforms induce export growth. But world income was found to positively impact Ethiopia’s export receipts over time.Real Exchange Rate, Devaluation, Export Performance
The Dynamics between Real Exchange Rate Movements and Trends in Trade Performance: The Case of Ethiopia
ABSTRACT Ethiopia’s exchange rate policies have been a bone of contention for concerned economic analysts and commentators alike. This study takes a new look at the record to explore the impact of exchange rate liberalization reforms on export growth in Ethiopia. I employ generalized method of moments estimators (GMM) techniques on time series data for the period 1981- 2009. The study does not support the widely held view that exchange rate reforms induce export growth. But world income was found to positively impact Ethiopia’s export receipts over time
The Dynamics between Real Exchange Rate Movements and Trends in Trade Performance: The Case of Ethiopia
Ethiopia’s exchange rate policies have been a bone of contention for concerned economic analysts and commentators alike. This study takes a new look at the record to explore the impact of exchange rate liberalization reforms on export growth in Ethiopia. I employ generalized method of moments estimators (GMM) techniques on time series data for the period 1981-2009. The study does not support the widely held view that exchange rate reforms induce export growth. But world income was found to positively impact Ethiopia’s export receipts over time
Business Cycles and Financial Frictions under Money Growth Rule
In the last few years, macroeconomic modeling has emphasized the role of credit market frictions in magnifying and transmitting nominal and real disturbances and their implication for macro-prudential policy design. In this paper, I construct a modest New Keynesian general equilibrium model with active banking sector. In this set-up, the financial sector interacts with the real side of the economy via firm balance sheet and bank capital conditions and through their impact on investment and production decisions. I rely on the financial accelerator mechanism due to Bernanke et al. (1999) and combine it with a bank capital channel as demonstrated by Aguiar and Drumond (2007). The resulting model is calibrated from the perspective of a low-income economy reflecting the existence of relatively high investment adjustment cost, strong fiscal dominance, and underdeveloped financial and capital markets. The main objective of this exercise is to see whether the financial accelerator mechanism documented under interest-rate-rule based simulations could be replicated under a situation where the central bank uses money growth rule in stabilizing the national economy. The findings are broadly consistent with previous studies that demonstrated stronger role for credit market imperfections in amplifying and propagating monetary policy shocks
The Dynamics between Real Exchange Rate Movements and Trends in Trade Performance: The Case of Ethiopia
ABSTRACT Ethiopia’s exchange rate policies have been a bone of contention for concerned economic analysts and commentators alike. This study takes a new look at the record to explore the impact of exchange rate liberalization reforms on export growth in Ethiopia. I employ generalized method of moments estimators (GMM) techniques on time series data for the period 1981- 2009. The study does not support the widely held view that exchange rate reforms induce export growth. But world income was found to positively impact Ethiopia’s export receipts over time
Determinants of debt ratio levels among small-scale manufacturing enterprises in Ethiopia: Do government policies matter?
Businesses, consumers, and individual investors rely on a host of debt instruments when their
internal resources are insufficient. This paper explores the determinants of debt financing
choices among small-scale manufacturing enterprises in Ethiopia—with special focus on the role
of government policies. The study exploits survey data gathered from 1321 enterprises in the
Amhara region of Ethiopia and employs conditional mixed process (CMP) estimation technique
to isolate the key drivers of firm debt levels. The major econometric findings confirm that
enterprises that had some debt mix in their startup capital are more likely to be in higher debt
categories than those enterprises that kick start exclusively with their own internal resources. In
addition, the results also reveal that self-reported profitability, firm age, ownership structure,
access to business development services, and receipt of bureaucratic support during enterprise
formation process have strong effects on the degree of firms’ indebtedness. However, firm size,
gender, and owner-manager’s education have no discernible correlation with reported debt
levels in the sampled firms
Determinants of debt ratio levels among small-scale manufacturing enterprises in Ethiopia: Do government policies matter?
Businesses, consumers, and individual investors rely on a host of debt instruments when their
internal resources are insufficient. This paper explores the determinants of debt financing
choices among small-scale manufacturing enterprises in Ethiopia—with special focus on the role
of government policies. The study exploits survey data gathered from 1321 enterprises in the
Amhara region of Ethiopia and employs conditional mixed process (CMP) estimation technique
to isolate the key drivers of firm debt levels. The major econometric findings confirm that
enterprises that had some debt mix in their startup capital are more likely to be in higher debt
categories than those enterprises that kick start exclusively with their own internal resources. In
addition, the results also reveal that self-reported profitability, firm age, ownership structure,
access to business development services, and receipt of bureaucratic support during enterprise
formation process have strong effects on the degree of firms’ indebtedness. However, firm size,
gender, and owner-manager’s education have no discernible correlation with reported debt
levels in the sampled firms
A Small DSGE Model with Financial Frictions
In the last few years, macroeconomic modelling has emphasised the role of credit market
frictions in magnifying and transmitting nominal and real disturbances and their implication for
macro-prudential policy design. In this paper, we construct a modest New Keynesian general
equilibrium model with active banking sector. In this set-up, the financial sector interacts with
the real side of the economy via firm balance sheet and bank capital conditions and their
impact on investment and production decisions. We rely on the financial accelerator
mechanism due to Bernanke et al. (1999) and combine it with a bank capital channel as
demonstrated by Aguiar and Drumond (2007). We calibrate the resulting model from the
perspective of a low income economy reflecting the existence of relatively high investment
adjustment cost, strong fiscal dominance, and underdeveloped financial and capital markets
where the central bank uses money growth in stabilizing the national economy. Then we
examine the impulse response of selected endogenous variables to shocks stemming from the
fiscal authority, the monetary policy process, and technological progress. The findings are
broadly consistent with previous studies that demonstrated stronger role for credit market
imperfections in amplifying and propagating monetary policy shocks. Moreover, we also
compare the trajectory of the model economy under alternative monetary policy instruments.
The results suggest that the model with money growth rule generates higher volatility in output
and inflation than the one with interest rate rule
The Dynamics between Real Exchange Rate Movements and Trends in Trade Performance: The Case of Ethiopia
ABSTRACT Ethiopia’s exchange rate policies have been a bone of contention for concerned economic analysts and commentators alike. This study takes a new look at the record to explore the impact of exchange rate liberalization reforms on export growth in Ethiopia. I employ generalized method of moments estimators (GMM) techniques on time series data for the period 1981- 2009. The study does not support the widely held view that exchange rate reforms induce export growth. But world income was found to positively impact Ethiopia’s export receipts over time.KEYWORDS: Real Exchange Rate, Devaluation, Export Performance.