Long Run Effects of Foreign Aid on Economic Growth
DOI:
https://doi.org/10.33423/jabe.v22i13.3910Keywords:
business, economics, economic growth, foreign aid, long run effectsAbstract
This paper finds evidence of long run effects on a country’s per capita Gross Domestic Product (GDP) growth using a panel data set of 57 countries that received Official Development Aid (ODA) between 1970 and 2017. The results suggest a statistically significant “multiplier effect” that is sizable. Looking at foreign aid per capita the results suggests that policy makers can achieve a permanent 1% increase in per capita GDP growth by increasing per capita ODA by approximately $110. Similar results are found when using an alternative measure—ODA per Gross National Income—of foreign aid.
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Published
2020-12-20
How to Cite
Larsen, N. (2020). Long Run Effects of Foreign Aid on Economic Growth. Journal of Applied Business and Economics, 22(13). https://doi.org/10.33423/jabe.v22i13.3910
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