Aid and Income Stabilization |
| |
| Authors: | S Guillaumont Jeanneney S J‐A Tapsoba |
| |
| Institution: | 1. Centre d'études et de Recherches sur le Développement International (CERDI), Université d'Auvergne CNRS, 65 boulevard Fran?ois Mitterrand, 63000 Clermont‐Ferrand, France;2. International Monetary Fund, 70019th Street, N.W., Washington DC 20431, USA |
| |
| Abstract: | The potential stabilization of output shocks through official assistance flows is investigated is this paper. It contributes to the current debate on aid instability and argues that official assistance might cope with exogenous output shocks in recipient countries and stabilize resources available for national expenditure, including consumption and investment. High aid dependency and vulnerability to output shocks positively affect the stabilization property of aid. Contrasting with the current literature, the paper documents that aid volatility is not a significant determinant of the stabilizing or destabilizing impact of aid. |
| |
| Keywords: | |
|
|
