Does Trade Openness Reduce Inflation? Empirical Evidence from Ethiopia

Does Trade Openness Reduce Inflation? Empirical Evidence from Ethiopia

Minyahil Alemu Haile MSc in Economic Policy Analysis

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Does Trade Openness Reduce Inflation? Empirical Evidence from Ethiopia

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Abstract

Of the most commonly celebrated propositions in international trade is the hypothesis that trade liberalization is associated with declining prices, so that protectionism is inflationary. The New Growth Theory is strongly in favor of this view. However, the “Cost-push advocators” claim for the existence of positive correlations between trade openness and inflation variables. Moreover, empirical studies have been confirming inconclusive results regarding the nature of relationships between the two variables. These theoretical and empirical departures are the principal motivations to the current study. This study is aimed to test the relationship between inflation and trade openness variables in Ethiopia, using the time series data set for the period serially ranging from 1976/77 to 2016/77. Augmented Dickey Fuller and Phillips Perron approaches will be employed for testing the stationarity properties of individual variables in the model and the Johnson’s maximum likely-hood approach will be employed for cointegration tests.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Minyahil Alemu Haile. 2017. \u201cDoes Trade Openness Reduce Inflation? Empirical Evidence from Ethiopia\u201d. Global Journal of Management and Business Research - B: Economic & Commerce GJMBR-B Volume 17 (GJMBR Volume 17 Issue B1).

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GJMBR Volume 17 Issue B1

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-B Classification JEL Code: M29

Submission ReceivedDecember 16, 2016
Peer Review Double Blind
Handling Editor
Accepted January 2, 2017
Published January 15, 2017

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v1.2

Issue date

March 20, 2017

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Article Matrices

Total Score: 101

Country: Unknown

Subject: Global Journal of Management and Business Research - B: Economic & Commerce

Authors: Minyahil Alemu Haile (PhD/Dr. count: 0)

View Count (all-time): 186

Total Views (Real + Logic): 3690

Total Downloads (simulated): 1902

Publish Date: 2017 03, Mon

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Total Views: 3690

Total Downloads: 1902

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