On the substitutability between foreign aid and international credit
Subhayu Bandyopadhyay (),
Sajal Lahiri and
Javed Younas ()
Economics Letters, 2013, vol. 118, issue 2, 255-257
We examine the effect of relaxing a binding borrowing constraint for a recipient country on the amount of foreign aid, in a two-country, two-period, trade-theoretic framework. The relaxation unambiguously reduces the flow of foreign aid.
Keywords: Foreign aid; Borrowing constraint; Fungibility; Public input (search for similar items in EconPapers)
JEL-codes: F35 O10 (search for similar items in EconPapers)
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Working Paper: On the substitutability between foreign aid and international credit (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:2:p:255-257
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