Ethiopia’s Growth Acceleration and How to Sustain It

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dc.creatorMoller, Lars Christian
dc.creatorWacker, Konstantin M.
dc.date2015-07-14T22:18:53Z
dc.date2015-07-14T22:18:53Z
dc.date2015-06
dc.date.accessioned2026-07-01T00:46:07Z
dc.descriptionEthiopia has experienced a growth acceleration over the past decade on the back of an economic strategy emphasizing public infrastructure investment and supported by heterodox macro-financial policies. To analyze the country’s growth performance during 2000–13, the paper employs a neoclassical cross-country System Generalized Method of Moments regression model. The analysis finds that accelerated growth was driven by public infrastructure investment and restrained government consumption, and supported by a conducive external environment. Macroeconomic challenges arising from declining private credit, real currency overvaluation, and relatively high inflation held back some growth. The model accurately predicts Ethiopia’s growth over the period of analysis and is robust to country-specific parameter heterogeneity and alternative infrastructure variables. Looking ahead, model simulations under alternative policy scenarios are indicative that growth may decelerate in the coming decade, making it challenging for Ethiopia to attain its middle-income country target by 2025. Although simulated growth rates do not vary much by policy scenario, the paper discusses some of the emerging risks associated with a continued reliance on the current infrastructure financing model and potential future adjustments.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2015/06/24596060/ethiopia’s-growth-acceleration-sustain-itinsights-cross-country-regression-model
dc.identifierhttps://hdl.handle.net/10986/22164
dc.identifierhttps://doi.org/10.1596/1813-9450-7292
dc.identifier.urihttp://hdl.handle.net/123456789/410686
dc.languageEnglish
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 7292
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectECONOMIC BOOM
dc.subjectFORECASTS
dc.subjectGROWTH RATES
dc.subjectMONETARY POLICY
dc.subjectGOVERNMENT EXPENDITURES
dc.subjectPOLICY REFORMS
dc.subjectECONOMIC GROWTH
dc.subjectNATIONAL ACCOUNTS
dc.subjectCAPITAL ACCUMULATION
dc.subjectLAGS
dc.subjectREAL INTEREST RATES
dc.subjectVALUATION
dc.subjectSTRUCTURAL CHANGE
dc.subjectSTABILIZATION POLICIES
dc.subjectINCOME
dc.subjectINTEREST
dc.subjectMACROECONOMIC MANAGEMENT
dc.subjectINVESTMENT RATE
dc.subjectMARGINAL COST
dc.subjectINTEREST RATE
dc.subjectREAL GDP
dc.subjectEXCHANGE
dc.subjectMACROECONOMIC POLICY
dc.subjectGDP PER CAPITA
dc.subjectTELEPHONE COVERAGE
dc.subjectRESOURCE ALLOCATION
dc.subjectLIQUIDITY
dc.subjectEXPORTS
dc.subjectDEVELOPING COUNTRIES
dc.subjectMARGINAL PRODUCT
dc.subjectPOLITICAL ECONOMY
dc.subjectGROWTH MODEL
dc.subjectPUBLIC INFRASTRUCTURE
dc.subjectECONOMIC POLICY
dc.subjectDEVALUATION
dc.subjectHIGH INFLATION
dc.subjectVARIABLES
dc.subjectTRADE OPENNESS
dc.subjectBENCHMARKS
dc.subjectINPUTS
dc.subjectDEVELOPMENT GOALS
dc.subjectINFLATION
dc.subjectTRENDS
dc.subjectECONOMIC OUTLOOK
dc.subjectCENTRAL BANK LENDING
dc.subjectBANK LENDING
dc.subjectCENTRAL BANK
dc.subjectDEVELOPMENT
dc.subjectINDIVIDUAL POLICIES
dc.subjectSTANDARD DEVIATION
dc.subjectINFLUENCE
dc.subjectEMPIRICAL RESULTS
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectPER CAPITA INCOME
dc.subjectEXPORT GROWTH
dc.subjectTELECOMMUNICATIONS
dc.subjectLOW-INCOME COUNTRIES
dc.subjectINCOME INEQUALITY
dc.subjectECONOMIC DOWNTURNS
dc.subjectRELATIVE IMPORTANCE
dc.subjectBASE YEAR
dc.subjectPRODUCTIVITY
dc.subjectECONOMETRICS
dc.subjectINDUSTRIALIZATION
dc.subjectMONOPOLY
dc.subjectDEMOCRATIC INSTITUTIONS
dc.subjectDEBT
dc.subjectPER CAPITA GROWTH
dc.subjectINFLATION RATE
dc.subjectINCOME LEVELS
dc.subjectECONOMIC REFORMS
dc.subjectTRADE POLICY
dc.subjectBASKET OF GOODS
dc.subjectNATURAL RESOURCES
dc.subjectAVERAGING
dc.subjectINTEREST RATE EFFECT
dc.subjectPUBLIC INVESTMENT
dc.subjectMACROECONOMIC STABILIZATION
dc.subjectEXTERNAL FACTORS
dc.subjectTAXES
dc.subjectINFRASTRUCTURE INVESTMENT
dc.subjectLEADING INDICATORS
dc.subjectPRODUCTIVITY GROWTH
dc.subjectCONSUMPTION
dc.subjectEMPIRICAL GROWTH MODEL
dc.subjectHUMAN CAPITAL
dc.subjectVALUE ADDED
dc.subjectOPPORTUNITY COST
dc.subjectCAPITAL
dc.subjectWAGES
dc.subjectPOPULATION SHARE
dc.subjectINTERNATIONAL TRADE
dc.subjectOPEN MARKET OPERATIONS
dc.subjectECONOMETRIC ANALYSIS
dc.subjectMACROECONOMIC OUTCOMES
dc.subjectFINANCIAL POLICIES
dc.subjectEXTERNAL CONDITIONS
dc.subjectVALUE
dc.subjectBENCHMARKING
dc.subjectCOMPETITIVENESS
dc.subjectCREDIT
dc.subjectMACROECONOMICS
dc.subjectSTATE-OWNED ENTERPRISES
dc.subjectNATIONAL INCOME
dc.subjectFACTOR PRICES
dc.subjectAGRICULTURE
dc.subjectGROWTH MODELS
dc.subjectMEASUREMENT
dc.subjectERROR TERM
dc.subjectREAL EXCHANGE RATE
dc.subjectBENCHMARK
dc.subjectECONOMIC THEORY
dc.subjectGLOBAL CONDITIONS
dc.subjectPOLICY PERSPECTIVE
dc.subjectECONOMICS
dc.subjectFIXED EFFECTS
dc.subjectTRADE
dc.subjectGDP
dc.subjectGOODS
dc.subjectTHEORY
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectGROWTH RATE
dc.subjectINVESTMENT
dc.subjectGROWTH POLICY
dc.subjectGROWTH REGRESSIONS
dc.subjectTOTAL FACTOR PRODUCTIVITY GROWTH
dc.subjectCREDIT RATIONING
dc.subjectGROWTH PERFORMANCE
dc.subjectPOVERTY
dc.subjectGROWTH REGRESSION
dc.subjectCOUNTRY CHARACTERISTICS
dc.subjectECONOMIC TRENDS
dc.subjectGINI COEFFICIENT
dc.subjectOVERVALUATION
dc.subjectCAPITAL ACCOUNTS
dc.subjectPOLICY RESEARCH
dc.subjectGROWTH POLICIES
dc.subjectHIGH GROWTH
dc.subjectMACROECONOMIC POLICIES
dc.subjectEXCHANGE RATE
dc.subjectPUBLIC SPENDING
dc.subjectOUTCOMES
dc.subjectCONSUMPTION INCREASES
dc.subjectDEVELOPMENT INDICATORS
dc.subjectPOSITIVE EFFECTS
dc.subjectMIDDLE INCOME COUNTRIES
dc.subjectPRICES
dc.subjectLONG RUN
dc.subjectGROWTH PROJECTIONS
dc.subjectDEVELOPMENT POLICY
dc.subjectHUMAN DEVELOPMENT
dc.subjectFUTURE RESEARCH
dc.subjectGROWTH
dc.titleEthiopia’s Growth Acceleration and How to Sustain It
dc.titleInsights from a Cross-Country Regression Model
dc.typeWorking Paper
dc.typeDocument de travail
dc.typeDocumento de trabajo

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