Short-Period Macroeconomic Aspects of Foreign Aid

Amit Bhaduri and Rune Skarstein

Cambridge Journal of Economics, 1996, vol. 20, issue 2, 195-206

Abstract: By concentrating on the supply side, the existing literature on foreign aid, e.g. the Two Gap or the Dutch Disease model, neglected the role that foreign aid might also play in influencing the level of domestic demand. This paper redresses the balance. It analyses the role of foreign aid in the short period by incorporating problems of both effective demand and supply side constraints. The analysis shows how and why aid can be useful or wasteful, especially in the context of economic liberalization. This may, for example, imply that an increase in foreign aid has to be combined with an appropriate expansionary domestic demand policy in order to stimulate domestic employment and output. (c) 1996 Academic Press Limited Copyright 1996 by Oxford University Press.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:cambje:v:20:y:1996:i:2:p:195-206

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Cambridge Journal of Economics is currently edited by Jacqui Lagrue

More articles in Cambridge Journal of Economics from Cambridge Political Economy Society Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().