This paper focuses on the macroeconomic aspects of fiscal management in aid-receiving countries. Despite the declining share of aid in budgets of donor countries, aid continues to play an important role in many developing countries. The paper first discusses the implications of aid in the...

This paper discusses the forces driving capital flows in the transition countries of Central and Eastern Europe (CEE). It argues that various influences - specifically, the real exchange rate history and trend and the factor intensity of production - can combine to motivate very large capital...

The paper examines the effects of aid and its volatility on consumption, investment, and the structure of production in the context of an intertemporal two-sector general equilibrium model. A permanent flow of aid finances mainly consumption, a result consistent with the historical failure of...

This paper discusses the forces driving capital flows in the transition countries of Central and Eastern Europe (CEE). It argues that various influences – specifically, the real exchange rate history and trend and the factor intensity of production – can combine to motivate very large...