Trade and Development When Exports Lack Diversification: A Case Study from Malawi (Paperback) (ISBN-13: 9781249315797)

Developing countries, particularly those that depend heavily on a small number of agricultural exports, are vulnerable to domestic and international shocks. These countries often have difficulty achieving sustained economic growth. This analysis uses Malawi, a country that earns most of its foreign exchange from tobacco, as a case study of export concentration and heavy exposure to volatility. The econometric results suggest that the decline in Malawi's gross domestic product (GDP) when tobacco exports are falling is almost three times greater than the increase in GDP when exports are rising. Model based simulations indicate that variability in tobacco exports leads to slower economic growth because GDP falls by a relatively large amount in response to a given decrease in exports, while recovering little during an upswing in exports. Gains in tobacco yield and improvements in marketing efficiency, however, can help buffer Malawi's GDP from variability in export revenues.

Author: United Economic Research Service (Ers),Suresh Persaud,Birgit Meade
ISBN-10: 1249315794
ISBN-13: 9781249315797
Publisher: Bibliogov
Language: English
Published: 08/29/2012
Pages: 46
Format: Paperback
Weight: 0.22lbs
Size: 9.69h x 7.44w x 0.10d