Dynamic Sectoral linkages in the Ethiopian Economy: a preliminary Assessment

Course ID
Ethiopian Economics Association (EEA)
Kassahun Tadesse

Using a time series data from 1960-2003, the paper aims at investigating the long run dynamic linkages between agriculture, industry (manufacturing) and services in the Ethiopian economy. An attempt is also made to test the causality among the sectoral GDPs of the major sectors of the economy. The methodology adopted in the study is the Johansen cointgration analysis. Accordingly, we have found that there is long run interdependence between output in the agricultural and industrial (manufacturing) sectors and services. In addition, we have obtained that there is complimentarity between output in industry and agriculture while there is a negative relationship between expansion in services and agricultural GDP. Industrial output and services are found to be weakly exogenous to the system suggesting causality runs from industrial output and services to that of agriculture. That is, an increase in agricultural output is usually preceded by an
increase in industrial output in the long run.

Corporate Author:Ethiopian Economic Association/Ethiopian Economic Policy Research Institute (EEA/EEPRI)
Publisher:Ethiopian Economic Association/Ethiopian Economic Policy Research Institute (EEA/EEPRI)
Primary Descriptors:Ethiopian Economy – 1974

Geographic Descriptors:Ethiopia
Cataloge Date:03/02/2013
Broad Subject heading:Economic conditions – 1975
Call Number:WPN 3/2006
Serial Key Title:EEA/EEPRI working paper
Publication catagory:Working paper
Content type:EEA Publication
Publication date:2013-11-02 00:00:00
Forum or Discussion date:2013-03-02 00:00:00
PDF file: WPN 3 2006_Kassahun Tadesse_Dynamic Sectoral linkages in the Ethiopian Eco.pdf
Place of publication:Addis Ababa, Ethiopia
Type of material:Periodical
Author: Kassahun Tadesse