06513oam 22013454 450 991082736450332120240402050625.01-4623-9211-31-4527-6825-01-4518-7062-01-282-84155-69786612841552(CKB)3170000000055110(EBL)1608019(SSID)ssj0000944035(PQKBManifestationID)11564343(PQKBTitleCode)TC0000944035(PQKBWorkID)10983253(PQKB)10847573(OCoLC)761966586(IMF)WPIEE2008204(MiAaPQ)EBC1608019(EXLCZ)99317000000005511020020129d2008 uf 0engurcnu||||||||txtccrForeign Aid and Real Exchange Rate Adjustments in a Financially Constrained Dependent Economy /Stephen Turnovsky, Serpil Tekin, Valerie Cerra1st ed.Washington, D.C. :International Monetary Fund,2008.1 online resource (47 p.)IMF Working PapersIMF working paper ;WP/08/204Description based upon print version of record.1-4519-1515-2 Includes bibliographical references.Contents; I. Introduction; II. Two Sector Model of Foreign Aid; A. The Economic Structure; B. Macroeconomic Equilibrium; III. Steady State Equilibrium; A. Long-Run Effects of Transfers on the Relative Price; B. Transfers, Economic Activity, and the Dutch Disease; IV. Numerical Analysis; A. Calibration; B. Optimal Government Spending; C. Initial Benchmark Equilibria; V. Foreign Aid Flows: General Characteristics of Real Exchange Rates; VI. Pure Transfer; A. Traded Sector is Capital Intensive: (α > β ); B. Nontraded sector is capital intensive: (β >α )VII. Productive Government Spending in the Traded Sector A. Traded sector is capital intensive (α > β ); B. Nontraded sector is capital intensive (β >α ); VIII. Productive Government Spending in the Nontraded Sector; IX. Welfare Analysis; X. Effect of Cost of Debt; XI. Conclusions; Tables; 1. The Benchmark Economy; 2. Key Steady-State Equilibrium Ratios; 3. Steady-State Responses to Permanent Changes; 4. Welfare Analysis; Figures; 1. Capital and Debt; 2. Financial Variables; 3. Sectoral Activity and Output; 4. Consumption and Welfare; 5. Sensitivity to Borrowing Premium: Untitled Transfer6. Sensitivity to Borrowing Premium: Productive Transfer to Traded Sector 7. Sensitivity to Borrowing Premium: Productive Transfer to Nontraded Sector; Appendix; ReferencesA dynamic dependent-economy model is developed to investigate the role of the real exchange rate in determining the effects of foreign aid. If capital is perfectly mobile between sectors, untied aid has no longrun impact on the real exchange rate. A decline in the traded sector occurs because aid, being denominated in traded output, substitutes for exports in financing imports. While untied aid causes short-run real exchange appreciation, this response is very temporary and negligibly small. Tied aid, by influencing sectoral productivity, does generate permanent relative price effects. The analysis, which employs extensive numerical simulations, emphasizes the tradeoffs between real exchange adjustments, long-run capital accumulation, and economic welfare, associated with alternative forms of foreign aid.IMF Working Papers; Working Paper ;No. 2008/204Economic assistanceEconometric modelsForeign exchange ratesEconometric modelsStructural adjustment (Economic policy)Econometric modelsExports and ImportsimfForeign ExchangeimfMacroeconomicsimfPublic FinanceimfProduction and Operations ManagementimfEmploymentimfUnemploymentimfWagesimfIntergenerational Income DistributionimfAggregate Human CapitalimfAggregate Labor ProductivityimfForeign AidimfMacroeconomics: ConsumptionimfSavingimfWealthimfNational Government Expenditures and Related Policies: GeneralimfCurrencyimfForeign exchangeimfInternational economicsimfPublic finance & taxationimfReal exchange ratesimfCapital productivityimfForeign aidimfConsumptionimfExpenditureimfInternational reliefimfEconomicsimfExpenditures, PublicimfTurkeyimfEconomic assistanceEconometric models.Foreign exchange ratesEconometric models.Structural adjustment (Economic policy)Econometric models.Exports and ImportsForeign ExchangeMacroeconomicsPublic FinanceProduction and Operations ManagementEmploymentUnemploymentWagesIntergenerational Income DistributionAggregate Human CapitalAggregate Labor ProductivityForeign AidMacroeconomics: ConsumptionSavingWealthNational Government Expenditures and Related Policies: GeneralCurrencyForeign exchangeInternational economicsPublic finance & taxationReal exchange ratesCapital productivityForeign aidConsumptionExpenditureInternational reliefEconomicsExpenditures, Public338.91Turnovsky Stephen123336Tekin Serpil1706813Cerra Valerie1680576DcWaIMFBOOK9910827364503321Foreign Aid and Real Exchange Rate Adjustments in a Financially Constrained Dependent Economy4094557UNINA