Logic of aid in an intertemporal setting
This 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.
|Date of creation:||Jun 2003|
|Date of revision:|
|Publication status:||Published in Review of International Economics, Volume 12, 1, 2004, pages 151-161|
|Contact details of provider:|| Postal: |
Phone: ++41 22 731 17 30
Fax: ++41 22 738 43 06
Web page: http://www.graduateinstitute.ch/economics
More information through EDIRC
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.:
- Robert M. Townsend, .
"Risk and Insurance in Village India,"
University of Chicago - Population Research Center
91-3a, Chicago - Population Research Center.
- Obstfeld, Maurice, 1992.
"International Adjustment with Habit-Forming Consumption: A Diagrammatic Exposition,"
Review of International Economics,
Wiley Blackwell, vol. 1(1), pages 32-48, November.
- Maurice Obstfeld, 1992. "International Adjustment with Habit-Forming Consumption: A Diagrammatic Exposition," NBER Working Papers 4094, National Bureau of Economic Research, Inc.
- Jonathan Eaton & Raquel Fernandez, 1995.
Boston University - Institute for Economic Development
59, Boston University, Institute for Economic Development.
- Galor, O & Polemarchakis, H M, 1987.
"Intertemporal Equilibrium and the Transfer Paradox,"
Review of Economic Studies,
Wiley Blackwell, vol. 54(1), pages 147-56, January.
- Galor, O. & Polemarchakis, H.M., 1984. "Intertemporal equilibrium and the transfor paradox," CORE Discussion Papers 1984014, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, vol. 12(9), pages 879-900, September.
- Slobodan Djajic, Sajal Lahiri and Pascalis Raimondos-Møller, .
"Foreign aid, domestic investment and welfare,"
Economics Discussion Papers
463, University of Essex, Department of Economics.
- Turunen-Red, Arja H. & Woodland, Alan D., 1988. "On the multilateral transfer problem : Existence of Pareto improving international transfers," Journal of International Economics, Elsevier, vol. 25(3-4), pages 249-269, November.
- Klemperer, P., 1992.
"Competition when Consumers Have Switching Costs: An Overview,"
Economics Series Working Papers
99142, University of Oxford, Department of Economics.
- Klemperer, Paul, 1992. "Competition When Consumers Have Switching Costs: An Overview," CEPR Discussion Papers 704, C.E.P.R. Discussion Papers.
- Bhagwati, Jagdish N & Brecher, Richard A & Hatta, Tatsuo, 1983. "The Generalized Theory of Transfers and Welfare: Bilateral Transfers in a Multilateral World," American Economic Review, American Economic Association, vol. 73(4), pages 606-18, September.
When requesting a correction, please mention this item's handle: RePEc:gii:giihei:heiwp06-2003. 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: (Maria Sokolova)
If references are entirely missing, you can add them using this form.