This paper is aimed at assessing the effects of aid on fiscal behaviour in Indonesia. There are four main findings. First, the inflow of aid is driven primarily by the need to fill the fiscal gap; that is, aid is demand driven. Second, although project aid is by definition intended for...

An important element of the Thai crisis was the sterilisation of reserve outflows by the monetary authorities in an attempt to bailout fragile banks. This paper develops a new second generation currency crisis model to explore the effects of such a policy.