This paper is a contribution to the literature on aid and growth. Despite an extensive existing empirical literature in this area, studies have not paid much attention to the importance of transmission mechanisms in determining the influence of aid inflows on growth rates. In other words,...

Given the significant inflows of foreign aid to sub-Saharan Africa (SSA) the possibility of Dutch Disease has been a concern. Most macroeconomic models predict that aid inflows, especially if large and/or unanticipated (shocks), will lead to an appreciation of the real exchange rate and...

The 1990s have witnessed an increase in private capital inflows to sub-Saharan African (SSA) countries. Such capital flows are viewed as volatile and hence a threat to macroeconomic stability. A sudden reversal of capital inflows was one factor underlying the East Asian crisis of 1997. This...