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Volume :22 Issue : 2 2015      Add To Cart                                                                    Download

The Impact of External Grants and Aids on the Palestinian Macro Economic indices: An Econometric Study of the Period (1994-2013)

Auther : Omar M. Abu-Eideh

The aim of this research is to analyze the impact of external grants and aids on the Palestinian macroeconomic indices during the period (1994-2013). In order to achieve such an aim an econometric model has been adopted based on two main equations. The first tested the same impact on the economic growth in Palestine. The empirical results of the model show a positive relationship between external grants and aids and the macroeconomic indices, viz. The impact on GDP was 0.34%, on the standard of living 0.11%, on the final consumption of the household sector 0.32%, on the final consumption of the Palestinian society working labor 0.45%, on the exports of goods and services 0.47%, and on the public debt 0.93%. The results also revealed that the impact of external grants and aids on economic growth in Palestine was 1.71%. In the light of the above results, the main recommendations of the research are: (1) the external grants and aids must be directed to the productive sectors in the economy and should be used to lower the unemployment rate and (2) external grants and aids should be managed in a way that is capable of creating actual development in the economy in order to lower the level of external dependence and move toward self-dependence.

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Nov 19, 2019

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