Aid for trade, infrastructure, and growth

    Research output: Contribution to journalArticle

    2 Citations (Scopus)

    Abstract

    Aid for trade is a new foreign aid initiative to assist recipient countries to build trade-related infrastructure. We formulate a small-country, two-good (i.e., investment and consumption goods), two-factor (i.e., capital and labor) endogenous growth model with learning by doing and intersectoral knowledge spillovers, where the import transport cost depends inversely on public infrastructure. Focusing on the case where the country is incompletely specialized and imports the investment good, we show that a permanent increase in the recipient's aid/GDP ratio raises the steady-state growth rate if and only if the investment good is more labor-intensive.

    Original languageEnglish
    Pages (from-to)886-909
    Number of pages24
    JournalInternational Tax and Public Finance
    Volume20
    Issue number6
    DOIs
    Publication statusPublished - 2013

    Fingerprint

    Import
    Labor
    Factors
    Public infrastructure
    Knowledge spillovers
    Foreign aid
    Learning-by-doing
    Endogenous growth model
    Transport costs
    Small countries

    Keywords

    • Aid for trade
    • Endogenous growth
    • Public infrastructure
    • Stolper-Samuelson theorem
    • Transfer paradox

    ASJC Scopus subject areas

    • Finance
    • Accounting
    • Economics and Econometrics

    Cite this

    Aid for trade, infrastructure, and growth. / Naito, Takumi.

    In: International Tax and Public Finance, Vol. 20, No. 6, 2013, p. 886-909.

    Research output: Contribution to journalArticle

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