On the substitutability between foreign aid and international credit

We examine the effect of relaxing a binding borrowing constraint for a recipient country on the amount of foreign aid, in a two-country, two-period, trade-theoretic framework. The relaxation unambiguously reduces the flow of foreign aid.

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Year of publication:	2013
Authors:	Bandyopadhyay, Subhayu ; Lahiri, Sajal ; Younas, Javed
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 118.2013, 2, p. 255-257
Publisher:	Elsevier
Subject:	Foreign aid \| Borrowing constraint \| Fungibility \| Public input

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Type of publication:	Article
Classification:	F35 - Foreign Aid ; O10 - Economic Development. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010608069