Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244439 
Year of Publication: 
2008
Series/Report no.: 
Working Paper No. 3/2008
Publisher: 
Örebro University School of Business, Örebro
Abstract: 
In this paper we discuss the impact of scaling-up aid in Tanzania using an economy-wide dynamic CGE model. The major conclusions coming out from this work is that productivity effects matter. If additional aid and consequently increased public spending has a positive impact on productivity this would spur GDP growth and reduce the risk of an appreciating real exchange rate. In a way this resembles previous results in the aid-growth literature that aid has a positive impact on growth in a country with good economic policies assuming that good policies have a positive impact on productivity. Presenting various scenarios on the impact of additional aid a sustained GDP growth rate of around 7 percent would be possible to achieve in a modest scaling-up aid scenario without any significant changes in the real exchange rate.
Subjects: 
Aid:Dutch:Disease:Tanzania
JEL: 
F35
O11
O55
Document Type: 
Working Paper

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