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Virtuous Circles and the Case for Aid

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Virtuous Circles and the Case for Aid. / Carter, Paddy; Temple, Jon.

In: IMF Economic Review, 16.11.2016.

Research output: Contribution to journalArticle

Harvard

Carter, P & Temple, J 2016, 'Virtuous Circles and the Case for Aid', IMF Economic Review. https://doi.org/10.1057/s41308-016-0012-2

APA

Carter, P., & Temple, J. (2016). Virtuous Circles and the Case for Aid. IMF Economic Review. https://doi.org/10.1057/s41308-016-0012-2

Vancouver

Carter P, Temple J. Virtuous Circles and the Case for Aid. IMF Economic Review. 2016 Nov 16. https://doi.org/10.1057/s41308-016-0012-2

Author

Carter, Paddy ; Temple, Jon. / Virtuous Circles and the Case for Aid. In: IMF Economic Review. 2016.

Bibtex

@article{65301e1299be435d96e53d719e4e50a8,
title = "Virtuous Circles and the Case for Aid",
abstract = "It is sometimes argued that foreign aid leads to a virtuous circle in which growth becomes self-reinforcing. We study two versions of this argument, using a modified neoclassical growth model in which the effects of parameter changes and capital accumulation are amplified. Simulations are used to quantify the welfare benefits from aid transfers. We find that, contrary to expectations, amplification makes only a modest difference to the welfare benefits from aid. This is true even when aid allows a faster exit from a vicious circle or poverty trap.",
keywords = "Foreign aid, amplification effects, virtuous circles, vicious circles",
author = "Paddy Carter and Jon Temple",
year = "2016",
month = "11",
day = "16",
doi = "10.1057/s41308-016-0012-2",
language = "English",
journal = "IMF Economic Review",
issn = "2041-417X",
publisher = "Palgrave Macmillan",

}

RIS - suitable for import to EndNote

TY - JOUR

T1 - Virtuous Circles and the Case for Aid

AU - Carter, Paddy

AU - Temple, Jon

PY - 2016/11/16

Y1 - 2016/11/16

N2 - It is sometimes argued that foreign aid leads to a virtuous circle in which growth becomes self-reinforcing. We study two versions of this argument, using a modified neoclassical growth model in which the effects of parameter changes and capital accumulation are amplified. Simulations are used to quantify the welfare benefits from aid transfers. We find that, contrary to expectations, amplification makes only a modest difference to the welfare benefits from aid. This is true even when aid allows a faster exit from a vicious circle or poverty trap.

AB - It is sometimes argued that foreign aid leads to a virtuous circle in which growth becomes self-reinforcing. We study two versions of this argument, using a modified neoclassical growth model in which the effects of parameter changes and capital accumulation are amplified. Simulations are used to quantify the welfare benefits from aid transfers. We find that, contrary to expectations, amplification makes only a modest difference to the welfare benefits from aid. This is true even when aid allows a faster exit from a vicious circle or poverty trap.

KW - Foreign aid

KW - amplification effects

KW - virtuous circles

KW - vicious circles

U2 - 10.1057/s41308-016-0012-2

DO - 10.1057/s41308-016-0012-2

M3 - Article

JO - IMF Economic Review

JF - IMF Economic Review

SN - 2041-417X

ER -