Climate change may impact economic growth through rainfall variability. This paper, using a simple growth model, demonstrates that the adverse impact of rainfall variability on economic growth depends on the rate of ex- pansion of the amplitude of rainfall variability and frequency of occurrence of extreme events. A co-integration analysis using time series data from Ethiopia shows both inter-annual and within-annual rainfall variations have negative efect on growth. Simulation results on the forgone growth due to rainfall variability for the last five decades implied that mitigation and adap- tation strategies towards climate change that reduce the impact of rainfall variability would put Ethiopia on a higher trajectory of growth.
Corporate Author:Ethiopian Economic Association/Ethiopian Economic Policy Research Institute (EEA/EEPRI)
Publisher:Ethiopian Economic Association/Ethiopian Economic Policy Research Institute (EEA/EEPRI)
Secondary Descriptor:Climatic changes – Economic aspects
Broad Subject heading:Economic development
Call Number:WPN 3/2012
Serial Key Title:EEA/EEPRI working paper
Publication catagory:Working paper
Content type:EEA Publication
Publication date:2013-02-02 00:00:00
Forum or Discussion date:2013-03-02 00:00:00
PDF file: WP 3 2012_Seid Nuru Ali_Clmate change and economic growth in a rain fed economy how much does rainfall variability cost Ethiopia.pdf
Place of publication:Addis Ababa, Ethiopia
Type of material:Periodical
Author: Seid Nuru Ali (Dr.).