Aid and Dutch Disease in Sub-Saharan Africa

David Fielding and Fred Gibson

No wp-2012-026, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: International aid has an ambiguous effect on the macroeconomy 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.

Keywords: Economic assistance and foreign aid; Foreign exchange; Macroeconomics; Production (Economic theory) (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Aid and Dutch Disease in Sub-Saharan Africa (2013)
Working Paper: Aid and Dutch Disease in Sub-Saharan Africa (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:wp-2012-026

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