In addition to a review of the literatures on the gravity equation, and on how foreign aid and trade are related, the purposes of this dissertation are (1) to develop an asymmetric version of the Anderson and van Wincoop (2003) model appropriate to applications explicitly involving developed and less developed countries, such as foreign aid; and (2) use this model to obtain empirical evidence of the positive effect of foreign aid on trade. Anderson and van Wincoop's (2003) model is extended to a dual context, where the developed North trades heterogeneous goods in a monopolistic competition framework and the less developed South trades homogeneous goods. In addition, the linearization technique that Baier and Bergstrand (2006) apply to Anderson and van Wincoop's (2003) model is extended to the present North-South dual context. This extension permits a better interpretation of the proposed model and increases the efficiency of the estimation. The result is an empirical model that is better suited to the analysis of North-South trade issues like the link between trade and aid. The empirical results are strongly significant and robust since they survive a series of sensibility analysis. Foreign aid explains 2% of the predicted increase in trade from 1966 to 2000 / acase@tulane.edu
| Identifer | oai:union.ndltd.org:TULANE/oai:http://digitallibrary.tulane.edu/:tulane_26184 |
| Date | January 2007 |
| Contributors | Silva, Simone Juhasz (Author), Nelson, Douglas (Thesis advisor) |
| Publisher | Tulane University |
| Source Sets | Tulane University |
| Language | English |
| Detected Language | English |
| Rights | Access requires a license to the Dissertations and Theses (ProQuest) database., Copyright is in accordance with U.S. Copyright law |
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