Logic of Aid in an Intertemporal Setting
AbstractThe paper studies the welfare implications of temporary foreign aid in the context of a simple two-country model of trade. In addition to its usual effects, a transfer of income in one period is assumed to influence the preferences of the recipient country in the following period. The implied changes in the terms of trade over the two periods are consistent with a number of possible outcomes with respect to the intertemporal welfare of the donor, the recipient, and the world as a whole. Particular attention is devoted to the conditions for strict Pareto improvement and the circumstances under which temporary aid transactions are likely to occur. Copyright Blackwell Publishing Ltd 2004.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 12 (2004)
Issue (Month): 1 (02)
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Other versions of this item:
- Slobodan Djajic & Sajal Lahiri & Pascalis Raimondos-Møller, . "Logic of Aid in an Intertemporal Setting," EPRU Working Paper Series 96-21, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Slobodan Djajic & Sajal Lahiri & Pascalis Raimondos-Moller, 2003. "Logic of aid in an intertemporal setting," IHEID Working Papers 06-2003, Economics Section, The Graduate Institute of International Studies.
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