Gearing Macroeconomic Policies to Manage Large Inflows of ODA: The Implications for HIV/AIDS Programmes

Anis Chowdhury and Terry McKinley

No RP2007-43, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper examines how macroeconomic policies can be managed to accommodate a large inflow of foreign aid to combat the HIV/AIDS epidemic and still maintain macroeconomic stability. Because of the daunting scale of this epidemic, funds need to be disbursed urgently in order to contain its spread, yet some economists worry that rapidly scaling up foreign assistance for this purpose will cause inflation and appreciation of the real exchange rate. If such effects occur, they could impair a country's international competitiveness and endanger its growth prospects.

Keywords: Central banking; Economic assistance and foreign aid; Economic policy; Foreign exchange; Macroeconomics (search for similar items in EconPapers)
Date: 2007
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