According to this study, help generally has minimal effect on economic growth. However, a strong result is that aid only encourages growth in politically stable environments, regardless of the effectiveness of the nation's economic policies. Even in the context of sensible policies, aid is ineffectual in a chaotic setting. The findings, however, suggest that greater aid flows support policy more effective in boosting growth than a favorable policy environment does. The empirical findings also offer some flimsy evidence in favor of the existence of a Laffer curve for help in politically stable nations. It is discovered that the size of the country and its level of development, rather than the effectiveness of the policy, determine how much aid is distributed.
It often pits proponents of exchange rate stability against those who are more concerned with national monetary policy autonomy and less concerned with exchange rate stability in this situation. The organizations that support an appreciated exchange rate and the groups that support a depreciated one tend to become more and more divided as a result. These differences have significant effects on the dollar-yen exchange rates, the European Monetary and Currency Union, and the coordination of global macroeconomic policies.
