Does Aid Mitigate External Shocks?
| Autor: | Benedikt Goderis, Paul Collier |
|---|---|
| Rok vydání: | 2009 |
| Předmět: |
JEL: O13
Geography Planning and Development Commodity Monetary economics Development O47 Aid effectiveness price shocks Exchange rate ddc:330 Economics jel:O47 F35 commodities commodity prices aid growth external shocks Macro and international economics Development economics Flexibility (engineering) JEL: O47 Ex-ante International economics Commodity Prices Aid Growth External Shocks jel:F35 O13 Exchange-rate flexibility Export price jel:O13 Development aid JEL: F35 export |
| Zdroj: | Review of Development Economics. 13:429-451 |
| ISSN: | 1467-9361 1363-6669 |
| Popis: | The authors investigate the role of aid in mitigating the adverse effects of commodity export price shocks on growth in commodity-dependent countries. Using a large cross-country dataset, they find that negative shocks matter for short-term growth, while the ex ante risk of shocks does not seem to matter. They also find that both the level of aid and the flexibility of the exchange rate substantially lower the adverse growth effect of shocks. While the mitigating effect of aid is significant in both countries with pegs and countries with floats, the effect seems to be smaller for the latter, suggesting that aid and exchange rate flexibility are partly substitutes. They investigate whether aid has historically been targeted at shock-prone countries, but find no evidence that this is the case. This suggests that donors could increase aid effectiveness by redirecting aid toward countries with a high incidence of commodity export price shocks. |
| Databáze: | OpenAIRE |
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