Djajic, Slobodan; Lahiri, Sajal; Raimondos-Moller, Pascalis - International Economics Section, The Graduate Institute … - 2003
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...