Aid, Policies and Growth: A Non-Canonical Alternative for solving This Puzzle.

This paper presents a two-sector small semi-open economy Ramsey growth model involving foreign aid as an input in the production function. An activist government allocates this input endogenously across sectors and optimizes policies in a non-standard way. Once calibrated, mainly on countries exhibiting medium relative prices values, the model reproduces the main stylized facts outlined in the literature and suggests a strategy that could make aid work.

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Year of publication:	2005
Authors:	Fuentes, Raúl
Institutions:	Verein für Socialpolitik, Ausschuss für Entwicklungsländer
Subject:	Foreign aid \| Economic development \| Economic growth \| Quantitative approach

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Extent:	application/pdf
Series:	Proceedings of the German Development Economics Conference, Kiel 2005.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 14
Classification:	O11 - Macroeconomic Analyses of Economic Development ; O23 - Fiscal and Monetary Policy in Development ; O41 - One, Two, and Multisector Growth Models ; F35 - Foreign Aid ; E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005082717