CGE model

Numerous econometric studies fail to detect a significant and robust relationship between international aid and economic growth in the recipient countries. Dutch Disease effects might be responsible for this result. This paper examines the relation between aid and its effectiveness in a multi-sector multi-household Computable General Equilibrium (CGE)-framework.

This study examines the magnitude of the macro and welfare effects generated by a realistic acceleration in the productivity growth of the Ethiopian livestock sector, as compared to historical trends and to alternative scenarios of productivity expansion in the cereal and cash crop sectors. Results from the dynamic general equilibrium simulations show large aggregate gains from livestock productivity acceleration and effects on poor households’ incomes and consumption that are roughly in line with those obtained under cereal growth.

Biofuels could offer new economic opportunities for low-income countries. We use a recursive dynamic computable general equilibrium model of Tanzania to evaluate different biofuels production options and estimate their impacts on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of biofuels production in countries like Tanzania will require engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options.