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CREDIT Research Papers, The University of Nottingham >
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http://hdl.handle.net/10419/65426
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| Title: | | A model of aid and Dutch Disease in Sub-Saharan Africa  |
| Authors: | | Fielding, David Gibson, Fred |
| Issue Date: | | 2012 |
| Series/Report no.: | | CREDIT Research Paper 12/02 |
| Abstract: | | International aid has an ambiguous effect on the macro-economy of the recipient country. To the extent that aid raises consumer expenditure, there will be some real exchange rate appreciation and a shift of resources away from traded goods production and into non-traded goods production. However, aid for investment in the traded goods sector can mitigate this effect. Also, a relatively high level of productivity in the non-traded goods sector combined with a high level of investment will tend to depreciate the real exchange rate. We examine aid inflows in 26 Sub-Saharan African countries, and find a variety of macro-economic responses. Some of the variation in the responses can be explained by variation in observable country characteristics; this has implications for donor policy. |
| Subjects: | | Aid Dutch Disease Africa |
| JEL: | | F41 O56 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CREDIT Research Papers, The University of Nottingham
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