In this paper we examine the impact of tied aid on capital accumulation and welfare in the presence of a quota on imports. Using a simulation model we establish that tied aid can lower the relative domestic price of the manufactured good and therefore reduce the stock of capital. In the presence...

This paper investigates the role of infrastructure aid to developing countries beset with unemployment. Since unemployment persists in most developing countries with chronic foreign debts, the impact of infrastructure aid is analyzed using an extended Harris–Todaro model with two traded good...