Ethiopia

Ricardo Hausmann

Ricardo Hausmann

Director, Growth Lab
Rafik Hariri Professor of the Practice of International Political Economy, HKS

Ricardo Hausmann is the founder and Director of Harvard’s Growth Lab and the Rafik Hariri Professor of the Practice of International Political Economy at...

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Office Address: Rubenstein-338

Mailing Address
John F. Kennedy School of Government
Mailbox 34
79 JFK Street
Cambridge, MA 02138

Assistant: Alexandra Villegas
p: 617-496-3740

Development in Practice: Practical Applications of Economic Complexity in Ethiopia

By: Aziz Ben Baz (MPA/ID ’22)

Over the summer, I had the chance to work with the Growth Lab (GL) at Harvard’s Center for International Development (CID) on the Advancing Economic Diversification in Ethiopia project. One of the main reasons I chose to pursue the MPA/ID program at HKS is that I was a counterpart for the GL in my previous work. As such, it was a primary focus of mine to get immersed in the GL work during my time at HKS to get a...

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Financial Liberalization and Debt Sustainability in Ethiopia

By: Keita Takemura (MPA/ID ’22)

As an intern with the Growth Lab, I was working with the National Bank of Ethiopia on macroeconomic issues. Ethiopia has achieved rapid economic growth from the early 2000s, alongside large capital account and fiscal deficits (when the deficit is broadly defined). In spite of this situation where depreciation would be necessary to clear excess demand for FX, the exchange rate has not been devalued in a manner consistent with the level of deficit monetization. The exchange rate control, together with restrictions on financial account...

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lucy-luo

Lucy Luo

Research Intern (2021), Growth Lab

Lucy is a second-year MPA/ID student at Harvard Kennedy School.

At the Growth Lab, she is working with the National Bank of Ethiopia on...

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Center for International Development
79 JFK Street
Cambridge, MA 02138
Goldstein, P., 2020. Pathways for Productive Diversification in Ethiopia, Growth Lab at Harvard's Center for International Development.Abstract

Ethiopia will need to increase the diversity of its export basket to guarantee a sustainable growth path. Ethiopia has shown stellar growth performance throughout the last two decades, but, in this period, export growth has been insufficient to finance the country’s balance of payments needs. As argued in our Growth Diagnostic report,1 Ethiopia’s growth decelerated as a result of the increasing external imbalances which have resulted in a foreign exchange constraint. This macroeconomic imbalance is now slowing the rate of economic growth, job creation and poverty alleviation across the country. Although export growth will not be rapid enough to address the foreign exchange constraint on its own in the short-term, the only way for the country to achieve macroeconomic balance as it grows in the longer term is to increase its exports per capita. With only limited opportunities to expand its exports on the intensive margin, the Government of Ethiopia (GoE) will have to strategically support the diversification of its economy to expand its exports base.

This report applies the theory of Economic Complexity in order to describe the base of productive knowhow and assess the opportunities and constraints to diversification in Ethiopia’s economy. The theory of Economic Complexity offers tools to capture and quantitatively estimate the diversity and sophistication of productive knowhow in an economy and to analyze the potential to develop comparative advantage in new industries. These tools provide valuable inputs for informing diversification strategies and the use of state resources by providing rigorous information on the risks and potential returns of government industrial policies in support of different sectors.

Can Soylu

Can Soylu

Research Fellow, Growth Lab

Can joined the Center for International Development’s Growth Lab as a Research Fellow in 2020.

Before joining the Growth Lab, Can worked at the...

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Rushabh Sanghvi headshot

Rushabh Sanghvi

Former Research Assistant, Growth Lab

Rushabh Sanghvi joined the Growth Lab as a Research Assistant in August 2019. He graduated summa cum laude from Tufts University in 2018, with a Bachelor’...

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Jessie Lu headshot

Jessie Lu

Former Research Assistant, Growth Lab

Jessie Lu started at the Center for International Development’s Growth Lab as a Research Assistant in August 2019. Prior to joining the Growth Lab, she...

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