The Dynamic Implications of Foreign Aid and Its Variability /

The paper examines the effects of aid and its volatility on consumption, investment, and the structure of production in the context of an intertemporal two-sector general equilibrium model. A permanent flow of aid finances mainly consumption, a result consistent with the historical failure of aid in...

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Bibliographic Details
Main Author: Lane, Timothy
Other Authors: Arellano, Cristina, Bulir, Ales, Lipschitz, Leslie
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2005.
Series:IMF Working Papers; Working Paper ; No. 2005/119
Online Access:Full text available on IMF
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100 1 |a Lane, Timothy. 
245 1 4 |a The Dynamic Implications of Foreign Aid and Its Variability /  |c Timothy Lane, Leslie Lipschitz, Cristina Arellano, Ales Bulir. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2005. 
300 |a 1 online resource (41 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a The paper examines the effects of aid and its volatility on consumption, investment, and the structure of production in the context of an intertemporal two-sector general equilibrium model. A permanent flow of aid finances mainly consumption, a result consistent with the historical failure of aid inflows to translate into sustained growth. Shocks to aid are reflected mainly in investment fluctuations, as a result of consumption smoothing. Aid shocks result in substantial welfare losses, suggesting that aid variability should be taken into account in designing aid architecture. These results are consistent with the evidence from cross-country regressions of manufactured exports. 
538 |a Mode of access: Internet 
700 1 |a Arellano, Cristina. 
700 1 |a Bulir, Ales. 
700 1 |a Lipschitz, Leslie. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2005/119 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2005/119/001.2005.issue-119-en.xml  |z IMF e-Library