1995•RePEc: Research Papers in EconomicsOpen access

Foreign aid and the public sector : a simulation approach

Kanhaya L. Gupta, Robert Lensink

Abstract

The paper considers a (static) portfolio system that satisfies adding-up contraints and the gross substitution theorem. The paper shows the relationship of the two conditions to the weak dominant diagonal property of the matrix of interest rate elasticities. This enables to investigate the impact of simultaneous changes in interest rates on the asset demands.

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Key concepts: Private sector, Public sector, Government sector, Government (linguistics), Business, Economic sector, External sector, Economics