Aid for trade, infrastructure, and growth
Aid for trade is a new foreign aid initiative to assist recipient countries to build trade-related infrastructure. We formulate a small-country, two-good (i.e., investment and consumption goods), two-factor (i.e., capital and labor) endogenous growth model with learning by doing and intersectoral knowledge spillovers, where the import transport cost depends inversely on public infrastructure. Focusing on the case where the country is incompletely specialized and imports the investment good, we show that a permanent increase in the recipient’s aid/GDP ratio raises the steady-state growth rate if and only if the investment good is more labor-intensive. Copyright Springer Science+Business Media, LLC 2013
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Santanu Chatterjee & Georgios Sakoulis & Stephen Turnovsky, 2000.
"Unilateral Capital Transfers, Public Investment, and Economic Growth,"
Econometric Society World Congress 2000 Contributed Papers
1936, Econometric Society.
- Chatterjee, Santanu & Sakoulis, Georgios & Turnovsky, Stephen J., 2003. "Unilateral capital transfers, public investment, and economic growth," European Economic Review, Elsevier, vol. 47(6), pages 1077-1103, December.
- Santanu Chatterjee & Georgios Sakoulis & Stephen Turnovsky, 2000. "Unilateral Capital Transfers, Public Investment, and Economic Growth," Discussion Papers in Economics at the University of Washington 0008, Department of Economics at the University of Washington.
- Santanu Chatterjee & Georgios Sakoulis & Stephen Turnovsky, 2000. "Unilateral Capital Transfers, Public Investment, and Economic Growth," Working Papers 0008, University of Washington, Department of Economics.
- Raghuram Rajan & Arvind Subramanian, 2005.
"Aid and Growth; What Does the Cross-Country Evidence Really Show?,"
IMF Working Papers
05/127, International Monetary Fund.
- Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
- Raghuram G. Rajan, 2005. "Aid and Growth: What Does The Cross-Country Evidence Really Show?," Working Papers id:54, eSocialSciences.
- Raghuram G. Rajan & Arvind Subramanian, 2005. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," NBER Working Papers 11513, National Bureau of Economic Research, Inc.
- Mountford, Andrew, 1999.
"Trade Dynamics and Endogenous Growth: An Overlapping-Generations Analysis,"
London School of Economics and Political Science, vol. 66(262), pages 209-24, May.
- Mountford, A., 1996. "Trade dynamics and endogenous growth: an overlapping generations analysis," Discussion Paper Series In Economics And Econometrics 9621, Economics Division, School of Social Sciences, University of Southampton.
- Sala-I-Martin, X. & Barro, R.J., 1991.
"Public Finance in Models of Economic Growth,"
640, Yale - Economic Growth Center.
- Robert J. Barro & Xavier Sala-i-Martin, 1990. "Public Finance in Models of Economic Growth," NBER Working Papers 3362, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Public Finance in Models of Economic Growth," CEPR Discussion Papers 630, C.E.P.R. Discussion Papers.
- Christopher S Adam & Stephen A O'Connell, 2004. "Aid versus Trade Revisited: Donor and Recipient Policies in the Presence of Learning-by-Doing," Economic Journal, Royal Economic Society, vol. 114(492), pages 150-173, 01.
- James E. Anderson & Eric van Wincoop, 2004.
NBER Working Papers
10480, National Bureau of Economic Research, Inc.
- Verma, Rubina, 2012. "Can total factor productivity explain value added growth in services?," Journal of Development Economics, Elsevier, vol. 99(1), pages 163-177.
- Rajan, Raghuram G. & Subramanian, Arvind, 2011.
"Aid, Dutch disease, and manufacturing growth,"
Journal of Development Economics,
Elsevier, vol. 94(1), pages 106-118, January.
- Kaneko, Akihiko, 2000. "Terms of trade, economic growth, and trade patterns: a small open-economy case," Journal of International Economics, Elsevier, vol. 52(1), pages 169-181, October.
- Futagami, Koichi & Morita, Yuichi & Shibata, Akihisa, 1993. " Dynamic Analysis of an Endogenous Growth Model with Public Capital," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 607-25, December.
- Santanu Chatterjee & Stephen Turnovsky, 2005.
"Foreign Aid and Economic Growth: The Role of Flexible Labor Supply,"
UWEC-2004-07-P, University of Washington, Department of Economics, revised Nov 2005.
- Chatterjee, Santanu & Turnovsky, Stephen J., 2007. "Foreign aid and economic growth: The role of flexible labor supply," Journal of Development Economics, Elsevier, vol. 84(1), pages 507-533, September.
- H. Oniki & H. Uzawa, 1965. "Patterns of Trade and Investment in a Dynamic Model of International Trade," Review of Economic Studies, Oxford University Press, vol. 32(1), pages 15-37.
- Lahiri, Sajal & Raimondos-Moller, Pascalis, 1997. "On the tying of aid to tariff reform," Journal of Development Economics, Elsevier, vol. 54(2), pages 479-491, December.
- BAI, Chong-En & QIAN, Zhenjie, 2010. "The factor income distribution in China: 1978-2007," China Economic Review, Elsevier, vol. 21(4), pages 650-670, December.
- Wolfgang Keller, 1997.
"Trade and the Transmission of Technology,"
Development and Comp Systems
- Wolfgang Keller, 1996. "Trade and the Transmission of Technology," Development and Comp Systems 9609001, EconWPA.
- Keller, W., 1996. "Trade and the Transmission of Technology," Working papers 9620, Wisconsin Madison - Social Systems.
- Keller, W., 1997. "Trade and the Transmission of Technology," Working papers 9620r, Wisconsin Madison - Social Systems.
- Jungsoo Park, 2004. "International and Intersectoral R&D Spillovers in the OECD and East Asian Economies," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 739-757, October.
- Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," World Bank Economic Review, World Bank Group, vol. 12(1), pages 29-58, January.
- Calì, Massimiliano & te Velde, Dirk Willem, 2011. "Does Aid for Trade Really Improve Trade Performance?," World Development, Elsevier, vol. 39(5), pages 725-740, May.
- Tanzi, Vito & Zee, Howell H., 2000.
"Tax Policy for Emerging Markets: Developing Countries,"
National Tax Journal,
National Tax Association, vol. 53(n. 2), pages 299-322, June.
- Howell H. Zee & Vito Tanzi, 2000. "Tax Policy for Emerging Markets; Developing Countries," IMF Working Papers 00/35, International Monetary Fund.
- David Dollar & Craig Burnside, 2000.
"Aid, Policies, and Growth,"
American Economic Review,
American Economic Association, vol. 90(4), pages 847-868, September.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Spiros Bougheas & Panicos Demetriades & Edgar Morgenroth, 1996.
"Infrastructure, Transport Costs and Trade,"
Keele Department of Economics Discussion Papers (1995-2001)
96/7, Department of Economics, Keele University.
- Stiglitz, Joseph E, 1970. "Factor Price Equalization in a Dynamic Economy," Journal of Political Economy, University of Chicago Press, vol. 78(3), pages 456-88, May-June.
- Timothy D. Lane & Leslie Lipschitz & Cristina Arellano & Ales Bulir, 2005.
"The Dynamic Implications of Foreign Aid and Its Variability,"
IMF Working Papers
05/119, International Monetary Fund.
- Arellano, Cristina & Bulír, Ales & Lane, Timothy & Lipschitz, Leslie, 2009. "The dynamic implications of foreign aid and its variability," Journal of Development Economics, Elsevier, vol. 88(1), pages 87-102, January.
- William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
- Pack, Howard & Pack, Janet Rothenberg, 1993. "Foreign Aid and the Question of Fungibility," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 258-65, May.
- Lahiri, Sajal & Raimondos-Moller, Pascalis & Wong, Kar-yiu & Woodland, Alan D., 2002. "Optimal foreign aid and tariffs," Journal of Development Economics, Elsevier, vol. 67(1), pages 79-99, February.
- Baxter, Marianne, 1992.
"Fiscal Policy, Specialization, and Trade in the Two-Sector Model: The Return of Ricardo?,"
Journal of Political Economy,
University of Chicago Press, vol. 100(4), pages 713-44, August.
- Marianne Baxter, 1991. "Fiscal policy, specialization, and trade in the two-sector model: the return of Ricardo?," Discussion Paper / Institute for Empirical Macroeconomics 56, Federal Reserve Bank of Minneapolis.
- Jean-Pierre Drugeon & Odile Poulsen & Alain Venditti, 2003. "On Intersectoral allocations, factors substitutability and multiple long-run growth paths," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(1), pages 175-183, 01.
- Se-il Mun & Shintaro Nakagawa, 2008. "Cross-border transport infrastructure and aid policies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 465-486, June.
- Zhiqi Chen, 1992. "Long-Run Equilibria in a Dynamic Heckscher-Ohlin Model," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 923-43, November.
When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:20:y:2013:i:6:p:886-909. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.