Aid allocation effects on growth and poverty: A CGE framework
It has been argues that increased aid causes Dutch disease as a result of appreciation of the exchange rate which reduces the competitiveness of the country's exports. In this paper, we argue that if the aid is used productively, there are both short and long term gains. Applying a recursive dynamic general equilibrium model on Uganda, we find that while the currency appreciates and some exports decline, the overall impact on growth outweighs the losses in competitiveness. In addition, it aid is used productively, poverty would be substantially reduced as long as the aid increase is sustained.
|Date of creation:||May 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.eprc.or.ug
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:eprcrs:54937. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.