GTAP Resources: Resource Display
| GTAP Resource #7486 |
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"Trade Thrive in Ethiopia: Navigating Climate Change Impact- A Recursive Dynamic CGE Analysis" by Wassie, Mengistu Alamneh, Lukas Kornher and Joachim von Bruan Abstract This study evaluates the economic implications of the African Continental Free Trade Area (AfCFTA) in Ethiopia's climate-affected economy using a recursive dynamic Computable General Equilibrium (CGE) model. Simulations incorporating climate-induced productivity shocks under RCP 4.5 and RCP 8.5 scenarios reveal that climate change significantly reduces agricultural output and raises food prices, leading to macroeconomic and distributional challenges. Under RCP 8.5, agricultural GDP contracts by 6.2%, food prices increase by up to 25%, and inequality worsens. However, the implementation of AfCFTA—particularly when paired with trade facilitation—partially offsets these losses by enhancing manufacturing and service sector outputs, increasing exports, and improving household welfare. The GDP grows by 0.3%, and rural households in the lowest consumption quantile see welfare gains up to 5.95% under RCP 4.5. Trade liberalization also reallocates labor toward services and manufacturing, especially benefiting unskilled and semi-skilled labor. Despite an 11.5% decline in government tariff revenue, AfCFTA contributes to improved trade performance and resilience. The results underscore the importance of targeted trade policies, climate adaptation strategies, and industrial investments to balance growth, food security, and climate vulnerability. Ethiopia’s success under AfCFTA hinges on aligning trade reforms with climate resilience and inclusive development policies. |
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- Climate impacts - Trade and the environment - Other data bases and data issues - Economic development - Africa (East) |
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Public Access  Paper (325.3 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
