Foreign aid and consumption smoothing
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Foreign aid and consumption smoothing evidence from global food aid by Sanjeev Gupta

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Published by International Monetary Fund, Fiscal Affairs Department in [Washington, D.C.] .
Written in English


  • Food relief -- Developing countries -- Econometric models.,
  • Disaster relief -- Developing countries -- Econometric models.,
  • Economic assistance -- Developing countries -- Econometric models.,
  • Consumption (Economics) -- Developing countries -- Econometric models.

Book details:

Edition Notes

StatementSanjeev Gupta, Benedict Clements, and Erwin R. Tiongson.
GenreEconometric models.
SeriesIMF working paper -- WP/03/40
ContributionsClements, Benedict J., Tiongson, Erwin R., International Monetary Fund. Fiscal Affairs Dept.
The Physical Object
Pagination25 p. ;
Number of Pages25
ID Numbers
Open LibraryOL20683226M

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Title: Foreign Aid and Consumption Smoothing: Evidence from Global Food Aid - W P/03/40 Created Date: 3/5/ PM. The empirical literature on food aid and consumption smoothing has examined how food aid flows respond to shortfalls in food availability by first measuring food availability in terms of deviations from a trend (Mellor and Pandya-Lorch, ; Shapouri and Rosen, ), and then examining the statistical relationship between food aid and such : Benedict Clements. Global food aid is considered a critical consumption smoothing mechanism in many countries. However, its record of stabilizing consumption has been mixed. This paper examines the cyclical properties of food aid with respect to food availability in recipient countries, with a view to assessing its impact on consumption in some developing countries and transition economies, covering to Get this from a library! Foreign aid and consumption smoothing: evidence from global food aid. [Sanjeev Gupta; Benedict J Clements; Erwin Tiongson; International Monetary Fund. Fiscal Affairs Department.] -- Global food aid is considered a critical consumption smoothing mechanism in many countries. However, its record of stabilizing consumption has been mixed.

historical failure of aid inflows to translate into sustained growth. Shocks to aid are reflected mainly in investment fluctuations, as a result of consumption smoothing. Aid shocks result in substantial welfare losses, suggesting that aid variability should be taken into account in designing aid architecture. Victors in war have traditionally imposed repreations on the vanquished. The United States was the first power in history to change this accepted practice. United States assistance programs began after World War II, the greatest being the Marshall plan for Western Europe (–). Foriegn aid thereafter became big geopolitical business, and a new branch of economics sprang up: development. Books shelved as foreign-aid: The End of Poverty by Jeffrey D. Sachs, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit. significant in recent years, while foreign aid seems to be a stronger and more stable channel for smoothing domestic output shocks for PICs. JEL#: F21, F22, F24, F31 Keywords: Foreign Aid, Remittance Inflows, International Integration, Income Smoothing, Consumption Smoothing, Pacific Island Countries, Welfare Gains from Risk Sharing.

Aid in form of foreign loans were more economic growth enhancing than grants in Cameroon (Giles, ), Bangladesh (Islam, ). Clements, Gupta, Pivovarsky, and Tiongson () push for studies.   The main channels are cross-border ownership of assets which “smooth” income (making income growth in a country less sensitive to output growth), international transfers (remittances and foreign aid) which smooth disposable income for a given income, and borrowing and lending which smooth consumption for a given level of disposable income.   This paper explores income and consumption smoothing patterns among the member countries of each of the CFA zones—the CEMAC1 1 CEMAC stands for African Economic and Monetary Community. and the WAEMU2 2 WAEMU stands for West African Economic and Monetary Union. —during the period –   Table 2 reports the standard deviations and cross serial correlations of output and other aggregate time series data for wealth transfer recipients. Investment and wealth transfers are highly volatile. Consumption is slightly more volatile than output, which suggests difficulty in consumption smoothing, a feature typically observed in many developing countries (Rand & Tarp, ).