The dynamics of spending and absorption of aid : panel data analysis

In September 1999, the International Monetary Fund (IMF) established the Poverty Reduction and Growth Facility (PRGF) to make the reduction of poverty and the enhancement of economic growth the fundamental objectives of lending operations in its poorest member countries. This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use of aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. The paper shows that PRGF-supported programs permit countries to utilize all increases in aid within a few years, showing smoothed use of aid inflows over time. Our results reveal that spending is higher than absorption in both the long-run and short-run use of aid, which is a robust finding of the study. Furthermore, the paper demonstrates that the long-run spending exceeds the injected increase of aid inflows in the economy. In addition, the paper finds that the presence of a PRGF-supported program does not influence the actual absorption or spending of aid.

Consumption-based accounting of U.S. CO2 emissions from 1990 to 2010

To tackle global climate change, it is desirable to reduce CO2 emissions associated with household consumption in particular in developed countries, which tend to have much higher per capita household carbon footprints than less developed countries. Our results show that carbon intensity of different consumption categories in the U.S. varies significantly. The carbon footprint tends to increase with increasing income but at a decreasing rate due to additional income being spent on less carbon intensive consumption items. This general tendency is frequently compensated by higher frequency of international trips and higher housing related carbon emissions (larger houses and more space for consumption items). Our results also show that more than 30% of CO2 emissions associated with household consumption in the U.S. occur outside of the U.S. Given these facts, the design of carbon mitigation policies should take changing household consumption patterns and international trade into account.