Aid and growth regressions

Hansen, Henrik; Tarp, Finn

doi:10.1016/s0304-3878(00)00150-4

Cited by 865 publications

(554 citation statements)

References 27 publications

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“…The general picture is mixed and it does not seem warranted to conclude that aid exacerbates macroeconomic instability with adjacent welfare costs. Our results appear in line with those of Hansen and Tarp (2001), who argue that aid does seem in general to promote growth through savingsinvestment-growth linkages rather than being harmful to growth.…”

Section: Discussionsupporting

confidence: 91%

Business Cycles in Developing Countries: Are They Different?

2002

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According to Lucas (1981) understanding business cycles is the first step in designing appropriate stabilization policies. In this paper, we demonstrate a series of ways in which developing countries differ from their developed counterparts when focus is on the nature and characteristics of macroeconomic fluctuations. Cycles are shorter, making it necessary to modify the filtering procedures normally applied for industrialized countries. This leads to different stylized facts of the business cycle across countries and regions, and the developing countries are more diverse than the rather uniform industrialized countries. Great care is therefore needed when the causal mechanisms in economic models are specified. A "one-size fits all" approach is unlikely to be appropriate. Outline

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Section: Discussionsupporting

confidence: 91%

Business Cycles in Developing Countries: Are They Different?

2002

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“…These include research on the impact of aid on growth and changes in recipient policies. Hansen and Tarp (2001) conclude that whereas the effect of development assistance on economic growth may not be contingent on 'good policy', human capital could be the driving factor behind economic prosperity. The narrative is in accordance with a recent strand of literature on soft economics (i.e.…”

Section: Asongu (2013a)mentioning

confidence: 93%

Foreign Aid Fiscal Policy: Theory and Evidence

Asongu

Jellal²

2015

SSRN Journal

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The paper provides theoretical and empirical justifications for the instrumentality of foreign aid in stimulating private investment and fixed capital formation through fiscal policy mechanisms. We propose an endogenous growth theory based on an extension of Barro (1990) by postulating that the positive effect of aid mitigates the burden of the taxation system on the private sector of recipient countries. The empirical validity is based on data from 53 African countries for the period 1996-2010. While the findings on the tax effort channel are overwhelmingly consistent with theory across specifications and fundamental characteristics, those of the 'government expenditure' channel are a little heterogeneous but broadly in line with the theoretical postulations. Justification for the slight heterogeneity and policy implications are discussed.JEL Classification: B20; F35; F50; O10; O55

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“…Second, there is possibility that in the presence of good policy environment, Credit is translated into investment. However, Hansen and Tarp (2001) described that the role of macroeconomic policy for aid effectiveness is ambiguous.…”

Section: Girmamentioning

confidence: 99%

The impact of foreign aid on economic growth:Emperical evidence from Ethiopia (1974-2011) using ARDL approach

Girma¹

2015

J. Res. Econ. Int. Finance

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This paper investigates the impact of foreign aid on economic growth in Ethiopia using time series data for the period 1974 to 2011. Following the most recent literatures, the paper examines whether aid effectiveness is conditional on stable macroeconomic policy environment using the Autoregressive Distributed Lag (ARDL) approach to co-integration proposed by Pesaran and Shin [1997]. Results provide that the negative coefficient of separate foreign aid in regression model shows aid has negative impact on economic growth, but the positive coefficient of aid policy index interaction shows that aid has positively contributed to economic growth in Ethiopia if supplemented with stable macroeconomic policy environment.

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Aid and growth regressions

Cited by 865 publications

References 27 publications

Business Cycles in Developing Countries: Are They Different?

Business Cycles in Developing Countries: Are They Different?

Foreign Aid Fiscal Policy: Theory and Evidence

The impact of foreign aid on economic growth:Emperical evidence from Ethiopia (1974-2011) using ARDL approach

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