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The macroeconomic effects of aid in Kenya
Uppsala University, Humanistisk-samhällsvetenskapliga vetenskapsområdet, Faculty of Social Sciences, Department of Economics.
2003 (English)Independent thesis Basic level (degree of Bachelor)Student thesis
Abstract [en]

The macroeconomic rationale for external aid to developing countries is to positively influence savings, exports, foreign exchange and government revenue. In this paper, the macroeconomic impact of aid on Kenya over the period 1984-1996 has been studied with the help of the accounting framework model. No positive relationship was found between aid and exports, while aid and imports have shown to be clearly related. The Dutch disease theory of foreign aid inflows leading to the appreciation of the real exchange is not supported by the finfings of the paper: the real exchange rate depreciated for the longer period of the studied time frame. Aid is postitively correlated with public investments while the relationsship is weak with private investments. There was found some evidence of aid fungibility as the study showed that the government might have used aid as a substitute for taxation.

Place, publisher, year, edition, pages
Uppsala: Nationalekonomiska institutionen , 2003. , 37 p.
Keyword [en]
Business and economics
Keyword [sv]
National Category
Economics and Business
URN: urn:nbn:se:uu:diva-3961OAI: oai:DiVA.org:uu-3961DiVA: diva2:128962
Available from: 2003-12-29 Created: 2003-12-29

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