Question
Evaluate the following claim: Savings is not enough for the investment needs of developing countries. As such, if aid agencies and rich countries provide aid
Evaluate the following claim: “Savings is not enough for the investment needs of developing countries. As such, if aid agencies and rich countries provide aid to developing countries it will increase their rate of investment and generate economic growth.”
Give some examples of these policies.
Has such a policy worked, why or why not?
- What conclusions would we draw about the impact of foreign aid on economic growth and development if we were to use the Solow model to analyze this question? Please use a diagram to supplement your answer.
- How does your answer in Part II, 2. change if knowledge is a part of factors of production? Specifically, how does your aggregate production change, and its implication of foreign aids?
- “Aid for Investment.” From Easterly W., The Elusive Quest for Growth. MIT Press, 2001. Referring to evidence from the chapter, answer the questions:
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
