FOREIGN AID FLOWS AND REAL EXCHANGE RATE: EVIDENCE FROM SYRIA

H. Issa and Bazoumana Ouattara
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H. Issa: Damascus University

Journal of Economic Development, 2008, vol. 33, issue 1, 133-146

Abstract: This paper uses time series data from Syria for the period 1965 to 1997 to test the aid and ¡°Dutch disease¡± hypothesis. We employ the relatively new approach to cointegration, known as the Auto Regressive Distributed Lag (ARDL) approach. We find no support for this hypothesis neither in the long run nor in the short run. On the contrary, our results indicate that foreign aid flows are associated with depreciation of the real exchange rate. The main policy implication, based on the long run results, is that Syria can continue to receive aid without fears of impairing its export competitiveness.

Keywords: Aid Flows; Dutch Disease; Real Exchange Rate; Cointegration; Error Correction; Syria (search for similar items in EconPapers)
JEL-codes: C32 F35 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Foreign Aid Flows and Real Exchange Rate: Evidence from Syria (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:33:y:2008:i:1:p:133-146

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