Pinto Moreira, EmmanuelBayraktar, Nihal2012-03-302012-03-302008Journal of Policy Modeling01618938https://hdl.handle.net/10986/4845This paper extends the dynamic macroeconomic framework developed by Agenor et al. [Agenor, P.-R., Bayraktar, N., & Aynaoui, K. E. (2006, July). Roads out of Poverty? Assessing the Links between Aid, Public Capital, Growth, and Poverty Reduction. World Bank, Revised.]. As in the original model, linkages between foreign aid, public investment (education, infrastructure, and health) and growth are explicitly captured, but this time in a fixed nominal exchange rate regime. Although the nominal exchange rate is fixed, the relative price of domestic goods is endogenous, thereby allowing for potential Dutch disease effects associated with increases in aid. The impact of policy shocks on poverty is assessed by using partial growth elasticities. A policy experiment of increasing foreign aid illustrates the dynamic trade-offs between growth and poverty reduction in Niger.ENForeign Aid F350Measurement and Analysis of Poverty I320Welfare and Poverty: Government ProgramsProvision and Effects of Welfare Programs I380Economic Development: Human ResourcesHuman DevelopmentIncome DistributionMigration O150International Linkages to DevelopmentRole of International Organizations O190Measurement of Economic GrowthAggregate ProductivityCross-Country Output Convergence O470Journal ArticleWorld Bank