Cover The Macroeconomics of Scaling Up Aid
The Macroeconomics of Scaling Up Aid
Lessons from Recent Experience
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Abstract

This study analyzes key issues associated with large increases in aid, including absorptive capacity, Dutch disease, and inflation. The authors develop a framework that emphasizes the different roles of monetary and fiscal policy and apply it to the recent experience of five countries: Ethiopia, Ghana, Mozambique, Tanzania, and Uganda. These countries have often found it difficult to coordinate monetary and fiscal policy in the face of conflicting objectives, notably to spend the aid money on domestic goods and to avoid excessive exchange rate appreciation.

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Author:
Mr. Andrew Berg
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Mr. Mumtaz Hussain
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Mr. Shaun K. Roache
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Ms. Amber A Mahone
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Mr. Tokhir N Mirzoev
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Mr. Shekhar Aiyar
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Series:
Occasional Papers
Publisher:
International Monetary Fund
Language:
English
Publication Date:
23 Mar 2007
DOI:
https://doi.org/10.5089/9781589065918.084
ISBN:
9781589065918
ISSN:
0251-6365
Pages:
114
Keywords:
OP; nominal exchange rate; depreciation; deficit; exchange rate appreciation; terms-of-trade shock; treasury bill sale; currency depreciation; Real exchange rates; Inflation; Treasury bills and bonds; Monetary base; Africa
Legal-disclaimer:
The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.
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