The available evidence on the effects of aid on growth is notoriously mixed. We use a novel empirical methodology, a …, imports, and per capita GDP growth to a global aid shock (the common component of individual country aid-to-GDP ratios). We … find that the estimated cumulative resposive of exports and per capita GDP growth to a global aid shock are strongly …

, imports, and per capita GDP growth to a “global” aid shock. We find that a global aid shock can affect exports, imports, and … growth either positively or negatively. As a result, the relation between aid and growth is mixed, consistent with the … ambiguous results in the existing literature. For most countries in the sample, when aid reduces exports and imports, it also …

productive capacity to satisfy the aid-induced increased demand. Diagnoses on, and prognoses for, the Dutch disease should take …

This paper presents empirical evidence that the massive foreign aid inflows into Ghana that accompanied the 1983 … that aid inflows into Ghana, instead of causing real appreciation of the cedi, caused its depreciation. Using the … behavioral equilibrium real exchange rate approach, it is found that foreign aid inflows do have a significantly positive effect …

This paper studies how macroeconomic policies can help offset two unintended and undesirable features of foreign aid …: its volatility and Dutch disease. We present evidence that aid volatility augments trade balance volatility and that … foreign aid, with the important exception of years of adverse shocks, depresses exports. We also find that these effects can …

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 … inconclusive, but a common presumption is that aid has been associated with Dutch Disease effects in SSA. Previous empirical …

We examine aid-induced Dutch Disease - after controlling for the effects of remittances and FDI flows - in the context … aggregated annual data over the period 1980-2009. Aid causes real exchange rate appreciation in the case of Morocco, especially … either country. We discuss the policy implications of the main results: aid and other types of foreign exchange inflow have …