İktisadi yardımın enflasyon üzerindeki etkileri: Mali piyasadaki gelişimin rolü

This thesis investigates the relationship between foreign aid and inflationconsidering the effect of financial market development (FMD) on this relationship. Themain hypothesis is that aid has a significant positive impact on inflation. When thefinancial markets are developed enough, the upward effect of aid on inflation is expectedto be diminished. The dynamic relationship is analyzed utilizing generalized method ofmoments (GMM) estimation which accommodates the use of an unbalanced panel dataset, covering 60 countries in the period 1975-2004, where available. The results of theempirical analysis support the hypothesis. Furthermore, the results are robust to severalcontrol variables, and alternative measures of financial market development.Keywords: Aid, Inflation, Financial Market Development (FMD)