EconPapers    
Economics at your fingertips  
 

Virtuous Circles and the Case for Aid

Patrick Carter () and Jonathan Temple

No 10880, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: It is sometimes argued that foreign aid leads to a virtuous circle in which growth becomes self-reinforcing. We study two versions of this argument, using a modified neoclassical growth model in which the effects of parameter changes and capital accumulation are amplified. Simulations are used to quantify the welfare benefits from aid transfers. We find that, contrary to expectations, amplification makes only a modest difference to the welfare benefits from aid. This is true even when aid allows a faster exit from a vicious circle or poverty trap.

Keywords: Amplification effects; Foreign Aid; Vicious circles; Virtuous circles (search for similar items in EconPapers)
JEL-codes: F35 O40 (search for similar items in EconPapers)
Date: 2015-10
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10880 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Virtuous Circles and the Case for Aid (2017) Downloads
Working Paper: Virtuous Circles and the Case for Aid (2015) Downloads
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:cpr:ceprdp:10880

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=10880

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-03-31
Handle: RePEc:cpr:ceprdp:10880