World Bank Group2015-12-142015-12-142015-11-12https://hdl.handle.net/10986/23333This report addresses two questions: what explains Ethiopia’s growth acceleration?; and how can it be sustained? In brief, the authors find that Ethiopia’s rapid economic growth, concentrated in agriculture and services, was driven by substantial public infrastructure investment and supported by a conducive external environment. To sustain high growth, three policy adjustments are presented: identifying sustainable ways of financing infrastructure, supporting private investment through credit markets, and tapping into the growth potential of structural reforms.en-USCC BY 3.0 IGOFORECASTSRENT SEEKINGMONETARY POLICYECONOMIC GROWTHWORLD TRADE ORGANIZATIONPRODUCTIONUTILITY FUNCTIONSLAGSUNDERVALUATIONVALUATIONSTRUCTURAL CHANGEINTERESTMARGINAL COSTGDP PER CAPITAEXPORTSELASTICITYMARGINAL PRODUCTOPTIMIZATIONGROSS VALUEDEVALUATIONVARIABLESPRICINGPAYMENTSWEALTHSURPLUS LABORTRENDSCENTRAL BANK LENDINGCHOICETOTAL FACTOR PRODUCTIVITYEXPORT GROWTHECONOMIC BENEFITSECONOMIC COOPERATIONEXCHANGE RATESECONOMETRICSEXTERNALITIESMONOPOLYDEBTMARKETSWTOSMALLHOLDER AGRICULTUREINFLATION RATEECONOMIC SIZEINCOME LEVELSECONOMIC REFORMSELASTICITY OF SUBSTITUTIONUTILITYNATURAL RESOURCESSUBSIDIESINTEREST RATE EFFECTECONOMIC RESEARCHBANK DEPOSITSMACROECONOMIC STABILIZATIONEXTERNALITYCONSUMPTIONGROSS FIXED CAPITAL FORMATIONHUMAN CAPITALVALUE ADDEDECONOMIC PERFORMANCECAPITALINTERNATIONAL TRADEOPEN MARKET OPERATIONSBENCHMARKINGCOMPETITIVENESSTREASURY BILLSECONOMIC SECTORSDEMANDNATIONAL INCOMEAGGREGATE DEMANDEXCESS DEMANDECONOMYAGRICULTUREDEMOGRAPHIC EFFECTSGROWTH MODELSMIXED ECONOMYMEASUREMENTSHARESASSETSBENCHMARKECONOMIC THEORYTRADE LIBERALIZATIONECONOMIC SITUATIONMONETARY POLICIESECONOMICSECONOMIC MODELSPRODUCTION FUNCTIONINFLATION RATESFUNCTIONAL FORMSTAXATIONTRADEECONOMIC INTEGRATIONGDPTOTAL FACTOR PRODUCTIVITY GROWTHCREDIT RATIONINGSUPPLYGINI COEFFICIENTECONOMIC TRENDSLENDINGGROWTH POLICIESNOMINAL INTEREST RATEBANKING SUPERVISIONEXCESS SUPPLYAVERAGE PRODUCTIVITYFINANCIAL SECTOROUTCOMESOPEN ECONOMIESCONSUMPTION INCREASESPOSITIVE EFFECTSDEVELOPMENT POLICYINCOME GROUPSCOMPETITIONECONOMIC BOOMLIVING STANDARDSCAPITAL MARKETSRISKSREGULATORY FRAMEWORKCURRENCY APPRECIATIONGOVERNMENT EXPENDITURESSTOCKINCOMEMACROECONOMIC MANAGEMENTEXPECTATIONSMONEY SUPPLYINTEREST RATEEXCHANGEPROPERTY RIGHTSREAL GDPECONOMIC FORECASTINGDISCOUNT RATEMACROECONOMIC POLICYTELEPHONE COVERAGELIQUIDITYRESERVE REQUIREMENTSPOLITICAL ECONOMYWELFARERISK PREMIUMBONDSDIMINISHING RETURNSINCENTIVESMIDDLE INCOME COUNTRYDISTRIBUTIONTRADE REFORMSSUBSIDYBENCHMARKSINPUTSRETURNS TO SCALEAGRICULTURAL OUTPUTINFLATIONSECURE PROPERTY RIGHTSECONOMIC OUTLOOKSAFETY NETSBANK LENDINGCENTRAL BANKAGRICULTURAL PRACTICESDEVELOPMENTMACROECONOMIC STABILITYINFLUENCEMARGINAL PRODUCTSTRADE BALANCESAVINGSCOSTSPER CAPITA INCOMEDEVELOPMENT ECONOMICSTELECOMMUNICATIONSMONEYRENTINTEREST RATESPRODUCTIVITYINDUSTRIALIZATIONFAILURESDEPOSIT ACCOUNTSCRITERIAOPEN ECONOMYTRADE POLICYREAL INTEREST RATETAX REVENUESGROSS DOMESTIC PRODUCTTAXESLEADING INDICATORSPRODUCTIVITY GROWTHWAGESECONOMETRIC ANALYSISSAVINGS INCREASESFINANCIAL CRISISVALUECREDITMACROECONOMICSDEVELOPMENT STRATEGYPURCHASING POWERMARGINAL BENEFITSMARGINAL COSTSCONSUMERSECONOMIC EFFICIENCYReportWorld Bank10.1596/23333