2 - ii If Stiglitz(2000 were to advise the Irish on the best way to use foreign investment for economic growth what would he say Do not accept

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Name: Economics 115B Spring 2011 Dr. Janine L.F. Wilson 11. Do Aitken and Harrison (1999) believe that FDI is as beneficial as many development economists have asserted in the past? Why or why not? No, the technology spillovers are found in joint ventures only. There is also a loss in productivity for domestic firms in the same industry. Overall gains of FDI in terms of technology spillover when subtracting losses from market stealing are minimal. h. There is more thanjust FDI and FPI when an economy opens their financial system. Financial Iiberulization can include many types of financial flows entering the financial system of a developing country. (8 points) i. If Obstfeld (2009) were to advise the Irish on the best way to use foreign investment for economic growth, what would he say? Use the foreign investment to improve the functioning of your domestic financial system.
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Unformatted text preview: ii. If Stiglitz (2000) were to advise the Irish on the best way to use foreign investment for economic growth, what would he say? Do not accept short term financing from abroad, there are no advantages for the developing country. 2. The country of Sudan located in Northeastern Africa received $514 million in aid from the United States in 2009. a. Explain three reasons why a country would want aid money from the United States? (9 points) i. To make up for a foreign exchange gap. ii. To make up for a savings/investment gap. iii. Because they were told by the developed countries that this was necessary for growth. iv. The govemment wants to use the money to increase its power and status in the eyes of the people. v. The government wants some spending money that it feels the rich countries owe it. 4...
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This document was uploaded on 10/10/2011.

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