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| | | Title | Aid Allocation Effects on Growth and Poverty A CGE Framework | | Author | Twimukye, Evarist ; Nabiddo, Winnie ; Matovu, John Mary | | Subject | Development Aid | | Date of Publication | 2009 | | Publisher | Economic Policy Research Centre (EPRC) | | Number of Pages | 51 pages | | Language | English | | Geographical Coverage | Uganda | | Keywords | Poverty Alleviation, Exchange Rates | | Abstract | It 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 Holder | Economic Policy Research Centre (EPRC) | | Copyright URL | http://www.eprc.or.ug | | Filesize | 260257 MB | | File Format | PDF | | [ View / download original document ] |
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