05217oam 22011534 450 991078823910332120230721045631.01-4623-8910-41-4527-7027-11-282-84056-897866128405621-4518-6962-2(CKB)3170000000055012(EBL)1607849(SSID)ssj0001488371(PQKBManifestationID)11805053(PQKBTitleCode)TC0001488371(PQKBWorkID)11430473(PQKB)11542031(OCoLC)815737074(MiAaPQ)EBC1607849(IMF)WPIEE2008101(EXLCZ)99317000000005501220020129d2008 uf 0engurcnu||||||||txtccrWelfare Gains of Aid Indexation in Small Open Economies /Anubha DhasmanaWashington, D.C. :International Monetary Fund,2008.1 online resource (40 p.)IMF Working PapersIMF working paper ;WP/08/101Description based upon print version of record.1-4519-1416-4 Includes bibliographical references.Contents; I. Introduction; II. Primary Commodity Exports and Price Volatility; III. The Benchmark Model; IV. Model Calibration and Comparative Statics; V. Dynamics; VI. Results; VII. Conclusion; Figures; 1. Resource flow as a percentage of GDP; Tables; 1. Dynamic behavior of Aid; 2. Share of the leading primary commodity export (97-99); 3. Share of the Top Three Primary Commodities, (1997-99); 4. Instability indices of prices of major primary commodities during 1957-1999; 2. Steady state values; 3. Sensitivity analysis; 6. Welfare cost under alternative model specifications7. Welfare gains from indexed Aid 4. Stationary capital distribution; 8. Welfare gains from indexed Aid; 9. Welfare gains from indexed Aid; References; ReferencesForeign aid flows to poor, aid-dependent economies are highly volatile and pro-cyclical. Shortfalls in aid coincide with shortfalls in GDP and government revenues. This increases the consumption volatility in aid dependent countries, thereby causing substantial welfare losses. This paper finds that indexing aid flows to exogenous shocks like a change in the terms of trade can significantly improve the welfare of aid-dependent country by lowering its output and consumption volatility. Compared to the benchmark specification with stochastic aid flows, indexation of aid flows to terms of trade shocks can reduce the cost of business cycle fluctuations in the recipient country by four percent of permanent consumption. Moreover, use of indexed aid can allow donors to reduce the aid flows by three percent without lowering the level of welfare in the recipient country.IMF Working Papers; Working Paper ;No. 2008/101Economic assistanceDeveloping countriesEconometric modelsEconomic developmentDeveloping countriesEconometric modelsBusiness cyclesDeveloping countriesEconometric modelsInvestments: CommoditiesimfExports and ImportsimfMacroeconomicsimfForeign AidimfEmpirical Studies of TradeimfMacroeconomics: ConsumptionimfSavingimfWealthimfAgriculture: GeneralimfTrade: GeneralimfInternational economicsimfInvestment & securitiesimfAid flowsimfTerms of tradeimfConsumptionimfAgricultural commoditiesimfExportsimfEconomic assistanceimfEconomic policyimfnternational cooperationimfEconomicsimfFarm produceimfBurkina FasoimfEconomic assistanceEconometric models.Economic developmentEconometric models.Business cyclesEconometric models.Investments: CommoditiesExports and ImportsMacroeconomicsForeign AidEmpirical Studies of TradeMacroeconomics: ConsumptionSavingWealthAgriculture: GeneralTrade: GeneralInternational economicsInvestment & securitiesAid flowsTerms of tradeConsumptionAgricultural commoditiesExportsEconomic assistanceEconomic policynternational cooperationEconomicsFarm produce338.91Dhasmana Anubha1463966DcWaIMFBOOK9910788239103321Welfare Gains of Aid Indexation in Small Open Economies3673500UNINA