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Economic Growth and investment Nexus in Ethiopia

Abstract: 

This paper is about growth and its relationship to investment in Ethiopia argues that Ethiopia does not only need to grow but it needs to do so rapidly if it hopes to match the per capita income levels of middle and high income countries. From 1981 to 2000 economic growth in Ethiopia on average was 0.25 percent. The country has much unskilled labor and little capital in the economic sense. If output is to grow the country would have to import more capital. The thrust of the paper is more growth is preferred to less growth and more rapid growth to less rapid growth. Implicitly, factors that inhibit growth (namely, political instability, corruption) should be minimized and there should be policies in place to deal with acts of nature-drought and famine, which sap energy needed for worn. On the other hand, factors that promote growth (namely, borrowing of technology from abroad, marnet competition) should be encouraged. A simple growth model was used to establish the nexus of investment and growth. It shows that if investment to output rises by ten, growth would rise at 0.30. In Ethiopia, exports wilf be shown to exert a strong effect on growth and capital inflows no effect. Marnet competition appears quite vibrant in Addis Ababa and more of it should be encouraged

Corporate Author: 
Alemayehu Seyoum ... [et al.] (editor)
Publisher: 
Ethiopian Economic Association (EEA)
Primary Descriptors: 

Investment

Secondary Descriptor: 

Investment

Geographic Descriptors: 
Ethiopia
Cataloge Date: 
02/27/2013
Broad Subject heading: 
Economic development
Call Number: 
330.963 PRO 2005
Serial Key Title: 
Proceedings of the Second International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Volume: 
I
Publication date: 
2013-05-27 23:05:00
Forum or Discussion date: 
2013-02-27 14:55:43
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annualy