Do large capital inflows hinder competitiveness? The Dutch disease in Ethiopia

International audience ; This paper investigates whether large inflows of foreign aid and remittances have had a damaging impact on the Ethiopian real exchange rate (RER). We improve the current empirical literature by: (i) compiling a unique quarterly dataset to provide a larger sample size and enable the modelling of important intra-year dynamics - which should lead to better model specifications; (ii) providing a new empirical approach (Unobserved Components) to test the 'Dutch disease' hypothesis; and (iii) using several cointegration approaches to further test the robustness of our conclu... Mehr ...