Foreign aid and real exchange rate adjustments in a financially constrained dependent economy /

A dynamic dependent-economy model is developed to investigate the role of the real exchange rate in determining the effects of foreign aid. If capital is perfectly mobile between sectors, untied aid has no long-run impact on the real exchange rate. A decline in the traded sector occurs because aid,...

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Detalles Bibliográficos
Clasificación:Libro Electrónico
Autores principales: Cerra, Valerie (Autor), Tekin, Serpil (Autor), Turnovsky, Stephen J. (Autor)
Autor Corporativo: IMF Institute
Formato: Electrónico eBook
Idioma:Inglés
Publicado: Washington, D.C. : International Monetary Fund, ©2008.
©2008
Colección:IMF working paper ; WP/08/204.
Temas:
Economic assistance > Econometric models.
Foreign exchange rates > Econometric models.
Structural adjustment (Economic policy) > Econometric models.
Aide économique > Modèles économétriques.
Taux de change > Modèles économétriques.
Ajustement structurel (Économie) > Modèles économétriques.
Economic assistance > Econometric models
Foreign exchange rates > Econometric models
Structural adjustment (Economic policy) > Econometric models
Entwicklungshilfe.
Kaufkraftparität.
Finanzpolitik.
Theorie.
Acceso en línea:Texto completo
Descripción
Sumario:A dynamic dependent-economy model is developed to investigate the role of the real exchange rate in determining the effects of foreign aid. If capital is perfectly mobile between sectors, untied aid has no long-run impact on the real exchange rate. A decline in the traded sector occurs because aid, being denominated in traded output, substitutes for exports in financing imports. While untied aid causes short-run real exchange appreciation, this response is very temporary and negligibly small. Tied aid, by influencing sectoral productivity, does generate permanent relative price effects. The analysis, which employs extensive numerical simulations, emphasizes the tradeoffs between real exchange adjustments, long-run capital accumulation, and economic welfare, associated with alternative forms of foreign aid.
Notas:At head of title: IMF Institute.
"August 2008."
Descripción Física:1 online resource (45 pages) : illustrations
Bibliografía:Includes bibliographical references (pages 43-45).

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