Aid and Dutch Disease in the South Pacific
The impact of aid inflows on relative prices and output is ambiguous. Aid inflows that increase domestic expenditure are likely to cause real exchange rate appreciation, ceteris paribus. However, if this expenditure raises the capital stock in the traded goods sector, then output in this sector might not contract, at least in the steady state. Moreover, if investment in the nontraded goods sector is relatively high and/or productive, then there is not necessarily any real exchange rate appreciation in the steady state. We use time-series data to examine the impact of aid inflows on output and real exchange rates in ten South Pacific island states, and find aid inflows to produce a variety of outcomes in economies of different kinds.
|Date of creation:||2007|
|Contact details of provider:|| Postal: Katajanokanlaituri 6B, 00160 Helsinki|
Web page: http://www.wider.unu.edu/
More information through EDIRC
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.:
- Yves Bourdet & Hans Falck, 2006. "Emigrants' remittances and Dutch Disease in Cape Verde," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 267-284.
- Laplagne, Patrick & Treadgold, Malcolm & Baldry, Jonathan, 2001. "A Model of Aid Impact in Some South Pacific Microstates," World Development, Elsevier, vol. 29(2), pages 365-383, February.
- White, Howard & Wignaraja, Ganeshan, 1992. "Exchange rates, trade liberalization and aid: The Sri Lankan experience," World Development, Elsevier, vol. 20(10), pages 1471-1480, October.
- Christopher S. Adam & David L. Bevan, 2006.
"Aid and the Supply Side: Public Investment, Export Performance, and Dutch Disease in Low-Income Countries,"
World Bank Economic Review,
World Bank Group, vol. 20(2), pages 261-290.
- Christopher Adam & David Bevan, 2004. "Aid and the Supply Side: Public Investment, Export Performance and Dutch Disease in Low Income Countries," Economics Series Working Papers 201, University of Oxford, Department of Economics.
- Elbadawi, Ibrahim A, 1999. "External Aid: Help or Hindrance to Export Orientation in Africa?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(4), pages 578-616, December.
- Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
- Gylfason, Thorvaldur & Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1997. "A Mixed Blessing: Natural Resources and Economic Growth," CEPR Discussion Papers 1668, C.E.P.R. Discussion Papers.
- repec:oxf:wpaper:wps/2000-19 is not listed on IDEAS
- Thierry Tressel & Alessandro Prati, 2006. "Aid Volatility and Dutch Disease; Is There a Role for Macroeconomic Policies?," IMF Working Papers 06/145, International Monetary Fund.
- Christopher S. Adam & David L. Bevan, 2003.
"Aid, Public Expenditure and Dutch Disease,"
CSAE Working Paper Series
2003-02, Centre for the Study of African Economies, University of Oxford.
- Nyoni, Timothy S., 1998. "Foreign Aid and Economic Performance in Tanzania," World Development, Elsevier, vol. 26(7), pages 1235-1240, July.
When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:rp2007-50. 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: (Mauricio Roa Grisales)
If references are entirely missing, you can add them using this form.