Summary I present an integral approach for the analysis of supply shocks, financial transfers and combinations thereof in a model of monopolistic competition. Introducing an informal sector reveals an asymmetry between „spending“ the value of the transfer by the recipient government and...

Summary We analyze some potential adverse macroeconomic side-effects of aid transfers: Real appreciation of the recipient′s currency may impair the aggregate output via crowding-out productive export sectors, the so-called Dutch Disease. We use simplified balance sheets to elucidate the...

We analyze some potential adverse macroeconomic side-effects of aid transfers: Real appreciation of the recipient’s currency may impair the aggregate output via crowding-out productive export sectors, the so-called Dutch Disease. We use simplified balance sheets to elucidate the effects of...

I present an integral approach for the analysis of supply shocks, financial transfers and combinations thereof in a model of monopolistic competition. Introducing an informal sector reveals an asymmetry between „spending“ the value of the transfer by the recipient government and...