This article develops in linear macroeconomic model of the Bangladesh economy to examine the quantitative impact of aid. The twenty-two equation, two-stage least squares model emphasized the role of aid in relieving constraints on production, which include the availability of food as well as of fertilizer, capital and other imports. Allowance is made for a possible negative effect of aid on government revenue collection efforts, as well as its positive effect on government development expenditures. The composition of aid is affected by food output. Simulation experiments are run to estimate the effect of a reduction in aid levels. It is estimated that with 95 percent confidence the cumulative impact of a halving of aid inflows over the 1960-79 period would have been a drop of between 5.9 and 11.8 percent in GDP.