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Foreign Aid Flows And Real Exchange Rate: Evidence From Syria

Author

Listed:
  • H. Issa

    (Damascus University)

  • B. Ouattara

    (Economics Department, University of Wales Swansea)

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.

Suggested Citation

  • H. Issa & B. Ouattara, 2008. "Foreign Aid Flows And Real Exchange Rate: Evidence From Syria," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(1), pages 133-146, June.
    • Handle: RePEc:jed:journl:v:33:y:2008:i:1:p:133-146
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    Cited by:

    1. Berg, Andrew & Portillo, Rafael & Zanna, Luis-Felipe, 2015. "Policy Responses to Aid Surges in Countries with Limited International Capital Mobility: The Role of the Exchange Rate Regime," World Development, Elsevier, vol. 69(C), pages 116-129.
    2. Sèna Kimm Gnangnon, 2020. "Development aid, remittances inflows and wages in the manufacturing sector," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 22(2), pages 278-304, December.
    3. Pedro M G Martins, 2010. "Capital Inflows Hinder Competitiveness? The Real Exchange Rate in Ethiopia," Discussion Papers 10/07, University of Nottingham, CREDIT.
    4. repec:icf:icfjfe:v:09:y:2011:i:4:p:28-59 is not listed on IDEAS
    5. Addison, Tony & Baliamoune-Lutz, Mina, 2013. "Aid and Dutch Disease: Evidence from Moroccan and Tunisian Time-Series Data," WIDER Working Paper Series 132, World Institute for Development Economic Research (UNU-WIDER).
    6. Mariem Brahim & Nader Nefzi & Hamed Sambo, 2017. "Remittances and the real effective exchange rates in MENA countries: What is the long run impact?," CEPN Working Papers 2017-15, Centre d'Economie de l'Université de Paris Nord.
    7. Pedro M. G. Martins, 2010. "Do Capital Inflows Hinder Competitiveness? The Real Exchange Rate in Ethiopia," Working Paper Series 1110, Department of Economics, University of Sussex Business School.
    8. Fredrick Ikpesu & Abraham Emmanuel Okpe, 2019. "Capital inflows, exchange rate and agricultural output in Nigeria," Future Business Journal, Springer, vol. 5(1), pages 1-8, December.
    9. Zhang, Wei-Wei & Sadiq, Ramla & Khan, Tahseen Mohsan & Khan, Muhammad Mohsan, 2021. "Policy implications of remittances, trade liberalization and Dutch disease – A comparative analysis based on income categorization," Resources Policy, Elsevier, vol. 72(C).
    10. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    11. Twimukye, Evarist P. & Matovu, John Mary & Levine, Sebastian & Birungi, Patrick, 2010. "Sectoral and welfare effects of the global economic crisis on Uganda: a recursive dynamic CGE analysis," Research Series 113619, Economic Policy Research Centre (EPRC).
    12. Farid Makhlouf & Mazhar Yasin Mughal, 2013. "Remittances, Dutch Disease, and Competitiveness: a Bayesian Analysis," Post-Print hal-01884858, HAL.
    13. Gnangnon, Sèna Kimm, 2020. "Development Aid, Remittances Inflows and Wages in the Manufacturing Sector of Recipient-Countries," EconStor Preprints 213439, ZBW - Leibniz Information Centre for Economics.
    14. Pedro Martins, 2011. "Do large capital inflows hinder competitiveness? The Dutch disease in Ethiopia," Post-Print hal-00748067, HAL.
    15. Burçak Polat & Antonio Rodríguez Andrés, 2019. "Do emigrants’ remittances cause Dutch disease? A developing countries case study," The Economic and Labour Relations Review, , vol. 30(1), pages 59-76, March.
    16. Tony Addison & Mina Baliamoune-Lutz, 2013. "Aid and Dutch Disease: Evidence from Moroccan and Tunisian Time-Series Data," WIDER Working Paper Series wp-2013-132, World Institute for Development Economic Research (UNU-WIDER).
    17. Rabhi, Ayoub, 2024. "Redefining the Monetary Landscape in the Sahel region in the Context of Morocco’s Atlantic Initiative," MPRA Paper 123863, University Library of Munich, Germany.

    More about this item

    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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