| Abstract: | An assessment on the contribution of exports of some mineral resources to Ethiopia’s
economy was carried out for the period 1994/95 – 2013/14. The study employed
the testing of the long run and short run relationship and causality between
exporting mineral resources and economic growth by including another macroeconomic
variable, i.e., popular time series econometric techniques of co-integration,
Vector error correction estimation and Granger causality test. The results from unit
root test and co-integration have shown the existence of long-run relations and volatility
among the variables, indicating that the export of minerals has not been
constant as it fluctuates from year to year.The Granger causality test had indicated
that in the short-run there was no causality among variables, but in the long-run,
there was bi-directional causality among the five variables, namely, GDP, Export
of Opal, Export of Tantalum, Export of Gold and Exchange Rate. The key finding in
this study is that export of major minerals had positively and significantly affected
economic growth in Ethiopia, and this growth had stimulated the export of minerals
in the long-run. |
