02000cas a2200241 a 4500 AALejournalIMF008043 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451846591 1018-5941 BD-DhAAL BD-DhAAL Mulder, Christian. The Macroeconomic Effects of Counterpart Funds and the Underlying Foreign Aid / Christian Mulder. Washington, D.C. : International Monetary Fund, 1992. 1 online resource (22 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Counterpart funds generated through foreign currency or commodity aid have again become an issue of interest, in view of the substantial buildup of these funds. Contrary to the usual approach a model is developed in this paper, which takes account of the budgetary impact, supply-side and money demand effects of counterpart funds and the underlying foreign aid. This model is used to show that counterpart funds need not have any economic impact if their creation, use, and effects are adequately monitored and understood, both by donors and by the authorities in the recipient country. The policy rules that ensure an inflation- and foreign reserves-neutral result from expected and unexpected foreign aid are derived and contrasted with a policy rule regarding unexpected foreign aid that is sometimes observed in IMF programs. A feasible alternative is developed. Various real world complications are shown not to alter the conclusions. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1992/047 Full text available on IMF http://elibrary.imf.org/view/journals/001/1992/047/001.1992.issue-047-en.xml IMF e-Library