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2009 AEC - Aid and Income Stabilization

10-Nov-2009

This article contributes to the debate on aid volatility and argues that official assistance copes with exogenous output shocks in recipient countries and stabilizes resources available for the financing of consumption, investment and net trade. Stabilizing aid is effective in aiddependent and vulnerable states. Aid volatility and disbursement lags are not significant determinants of the stabilizing impact of aid.

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