Format:
Online-Ressource (41 p)
Edition:
Online-Ausg.
ISBN:
1484397002
,
9781484397008
Series Statement:
IMF Working Papers Working Paper No. 14/18
Content:
We study the role of the exchange rate regime, reserve accumulation, and sterilization policies in the macroeconomics of aid surges. Absent sterilization, a peg allows for almost full aid absorption — an increase in the current account deficit net of aid—delivering the same effects as those of a flexible regime but with a necessary increase in inflation. Regardless of the regime, policies that limit absorption—and result in large accumulation of reserves—are welfare reducing: they help reduce the real appreciation (and inflation under the peg), but at the expense of reducing private consumption and investment, and therefore medium-term growth
Additional Edition:
Erscheint auch als Druck-Ausgabe Berg, Andrew Policy Responses to Aid Surges in Countries with Limited International Capital Mobility: The Role of the Exchange Rate Regime Washington, D.C. : International Monetary Fund, 2014 ISBN 9781484397008
Language:
English
DOI:
10.5089/9781484397008.001