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TitleAid Allocation Effects on Growth and Poverty A CGE Framework
AuthorTwimukye, Evarist ; Nabiddo, Winnie ; Matovu, John Mary
SubjectDevelopment Aid
Date of Publication2009
PublisherEconomic Policy Research Centre (EPRC)
Number of Pages51 pages
LanguageEnglish
Geographical CoverageUganda
KeywordsPoverty Alleviation, Exchange Rates
AbstractIt has been argued that increased aid causes Dutch disease as a result of appreciation of the exchange rate which reduces the competitiveness of the country’s exports. In this paper, we argue that if the aid is used productively, there are both short and long-term gains. Applying a recursive dynamic general equilibrium model on Uganda, we find that while the currency appreciates and some exports decline, the overall impact on growth outweighs the losses in competitiveness. In addition, if aid is used productively, poverty would be substantially reduced as long as the aid increase is sustained.
Copyright HolderEconomic Policy Research Centre (EPRC)
Copyright URLhttp://www.eprc.or.ug
Filesize260257 MB
File FormatPDF
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