ESSP II Research Note 3 "Economic Implications of Foreign Exchange Rationing in Ethiopia" by Paul Dorosh, Sherman Robinson, and Hashim Ahmed. Summary of ESSP II Discussion Paper 9. This paper examines macro-economic developments in Ethiopia between 2004/05 and 2008/09, focusing on the external accounts and the real exchange rate. Simulations using a Computable General Equilibrium (CGE) model of Ethiopia’s economy show that, compared to a policy of foreign exchange rationing, a policy of real exchange rate depreciation and no rationing improves economic efficiency and welfare of all households except those who receive the rents (excess profits) arising from rationing. Find more ESSP Research Notes on the Publication page. |