Fiscal Policy Stabilization And Growth In Developing Countries
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Fiscal Policy, Stabilization, and Growth in Developing Countries by Mr.Mario I. Bléjer,Mr.Ke-young Chu Pdf
Edited by Mario I. Blejer and Ke-young Chu, this book investigates linkages among components of the public sector, as well as between macro and micro aspects of fiscal policy, in developing countries. It presents 13 papers prepared by economists of the IMF's Fiscal Affairs Department.
Fiscal Policy, Stabilization, and Growth by Guillermo E. Perry,Luis Serv n,Rodrigo Suesc n Pdf
Fiscal policy in Latin America has been guided primarily by short-term liquidity targets whose observance was taken as the main exponent of fiscal prudence, with attention focused almost exclusively on the levels of public debt and the cash deficit. Very little attention was paid to the effects of fiscal policy on growth and on macroeconomic volatility over the cycle. Important issues such as the composition of public expenditures (and its effects on growth), the ability of fiscal policy to stabilize cyclical fluctuations, and the currency composition of public debt were largely neglected. As a result, fiscal policy has often amplified cyclical volatility and dampened growth. 'Fiscal Policy, Stabilization, and Growth' explores the conduct of fiscal policy in Latin America and its consequences for macroeconomic stability and long-term growth. In particular, the book highlights the procyclical and anti-investment biases embedded in the region's fiscal policies, explores their causes and macroeconomic consequences, and asesses their possible solutions.
Is Fiscal Policy the Answer? by Blanca Moreno-Dodson Pdf
Fiscal policy is an important instrument for maintaining and improving living standards. Such living standards can be viewed as an outcome of the interaction between the opportunities offered by society and the readiness and ability of each person to exploit them. Under certain circumstances, public finance can make an important contribution to the creation of opportunities within a given society by raising resources from the private sector through taxation or borrowing (domestic and external) and allocating those resources effectively and equitably in the form of public spending, including through public goods and transfers. The first chapters in this volume sketch out a framework that policy makers can use in adopting a more cohesive or integrated approach to the short- and long-term dimensions of fiscal policy. Here the traditional threefold rationale for fiscal policy proposed by Musgrave-stabilization, resource allocation, and distribution-continues to be useful. Other chapters in this volume take up some of the critical institutional challenges in implementing fiscal policy for longer-term growth and development. These chapters also look at the tools and approaches being developed to address these challenges. Improving the quality of public investment management is a particular priority in view of the recent evidence that as little as half of all public investment expenditure translates into productive capital stock. The last chapter in this volume is a case study of fiscal responses to the great recession in low-income Sub-Saharan Africa, looking at stabilization and the longer-run growth, as well as distributional aspects of such responses. The growing depth of domestic financial markets in many African countries rather unexpectedly is turning out to be a critical source of financing for fiscal policy responses.
Fiscal Stabilization and Growth by Sangyup Choi,Davide Furceri,João Tovar Jalles Pdf
Medium-term growth can be enhanced by fiscal stabilization. However, to date, no systematic effort has been made to study the specific channels through which fiscal stabilization affects growth. This paper examines the effect of fiscal stabilization on industrial growth and how this effect depends on different technological characteristics. It does so by applying a difference-in-difference approach to an unbalanced panel of 22 manufacturing industries for 55 advanced and developing economies over the period 1970-2014. The results suggest that fiscal stabilization fosters growth in industries with: i) higher external financial dependence and lower asset fixity; ii) higher degree of labor intensity; iii) higher investment lumpiness and relationship-specific input usage. These effects tend to be larger during economic recessions. The results are robust to different measures of fiscal stabilization and the inclusion of various interactions between a broad set of macroeconomic variables and production technologies.
Fiscal Policy in Developing Countries: by Roberto Perotti Pdf
This paper surveys fiscal policy in developing countries from the point of view of long-run growth. The first section reviews existing methodologies to estimate the effects of fiscal policy shocks and of systematic fiscal policy, with time series or with cross-sectional methods, and their applicability to developing countries. The second section surveys optimal fiscal policy in developing countries, by considering the role of the intertemporal government budget, and sustainability and solvency. It also reviews the fuzzy debate on "fiscal space" and "macroeconomic space" - and the usefulness (or lack thereof) of these terms for policy analysis. The third section asks what theory tells us about the optimal cyclical behavior of fiscal policy in developing countries. It shows that it very much depends on the assumptions about the interactions between credit market imperfections at the individual, firms, or government level, and on the supply of external funds to the country. Different sets of assumptions lead to different implications about optimal cyclical behavior. The available evidence on the cyclical behavior of fiscal policy, and possible reasons for the observed prevalence of a procyclical behavior in developing countries, is also reviewed. If one agrees that fiscal policy is indeed less countercyclical than we think is optimal, the issue is how to correct the problem. One obvious question is why government do not self-insure, i.e. why they do not accumulate assets in upturns and decumulate them in downturns. This leads to the analysis of fiscal rules and stabilization funds, in the fourth section. The last section concludes with what the author considers important research and policy questions in each part.
Economic Stabilization for Developing Countries by Anthony Clunies Ross Pdf
An introduction to macroeconomics in developing countries, this book presents the main elements of macroeconomics and shows how the models produced for industrialized societies need to be modified for various groups of less developed countries. It is desogned for those with little or no knowledge of economics, but who wish to understand the issues involved in the stabilizing of national income and the price level, and in keeping a sustainable balance of payments. It focuses on a number of measures designed to create stability including fiscal policy, the exchange rate, wages and interest rates. There are several case studies of policy experiments conducted since the mid 1970s.
Author : International Monetary Fund Publisher : International Monetary Fund Page : 257 pages File Size : 47,9 Mb Release : 2015-04-20 Category : Business & Economics ISBN : 9781498344654
Fiscal Policy and Long-Term Growth by International Monetary Fund Pdf
This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.
Fiscal Adjustment for Stability and Growth by International Monetary Fund. Fiscal Affairs Dept. Pdf
This paper aims to inform policymakers, and other interested parties, about the IMF’s approach to fiscal adjustment. The approach focuses on the role of sound and sustainable government finances in promoting macroeconomic stability and growth. Achieving, and maintaining, such a fiscal position often requires adjusting fiscal policy, as well as strengthening fiscal institutions. Fiscal adjustment may involve either tightening or loosening the fiscal stance, depending on individual country circumstances.
Monetary and Financial Policies in Developing Countries by Anis Chowdhury,Akhtar Hossain Pdf
The issue of economic development and monetary stability has produced one of the most passionate debates in economic literature. Yet, much of the evidence employed in this debate is contradictory. Monetary and Financial Policies in Developing Countries: Growth and Stabilization brings together diverse views on the subject within a coherent framework. The work includes: * a balanced assessment of empirical findings and their theoretical foundations on the role of money and growth * a discussion of financial liberalization reform in developing countries * an analysis of monetary policy as an instrument of economic stabilization * an examination of the monetary supply and demand process in developing countries * a study of the relationship between money, credit, the balance of payments, inflation and the exchange rate system * a reflection on market failures and the role of government.
Macroeconomic Stability in Developing Countries by Peter Montiel,Luis Servén Pdf
"In the 1990s macroeconomic policies improved in a majority of developing countries, but the growth dividend from such improvement fell short of expectations, and a policy agenda focused on stability turned out to be associated with a multiplicity of financial crises. Montiel and Serven take a retrospective look at the content and implementation of the macroeconomic reform agenda of the 1990s. They review the progress achieved with fiscal, monetary, and exchange rate policies across the developing world, and the effectiveness of the changing policy framework in promoting stability and growth. The main lesson is that slow growth and frequent crises resulted, more often than not, from shortcomings in the reform agenda of the 1990s. These shortcomings essentially concern the depth and breadth of the macroeconomic reform agenda, its attention to macroeconomic vulnerabilities, and the complementary reforms outside the macroeconomic sphere"--Abstract.
Fiscal Adjustment for Stability and Growth by Mr.James Daniel Pdf
The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.
Government Finance in Developing Countries by Richard Goode Pdf
Fiscal systems throughout the world have been severely strained in recent years, as governments have assumed more responsibility for economic management. The developing counties, where needs are greatest and resources scarcest, have found their finances especially hard pressed. This book examines a range of issues in government finance that confront developing countries: the formulation and execution of national budget; the objectives, size, and effects of expenditures; the purposes and results of various ways of taxing income, wealth, consumption, exports, or natural resources; the role of foreign and domestic borrowings; and the consequences of financing by money creation. The book also relates fiscal operations to goals such as growth and development, economic stabilization, equitable distribution, and national self-reliance. The author stresses the need to take account of economic and political conditions and particularly administrative capacity when evaluating the suitability of fiscal measures in developing countries.
Fiscal and Monetary Policies and Problems in Developing Countries by Eprime Eshag Pdf
Consideration on the use of fiscal and monetary policies in less developed countries to overcome the three sets of obstacles to development largely because of socio-political constraints. The three major obstacles to development are: inadequate investment; misallocation of investment resources; and internal and external imbalance i.e. inflation and balance of payments deficits.
Author : International Monetary Fund Publisher : International Monetary Fund Page : 107 pages File Size : 55,8 Mb Release : 2014-07-03 Category : Business & Economics ISBN : 9781498343664
Sustaining Long-Run Growth and Macroeconomic Stability in Low Income Countries - The Role of Structural Transformation and Diversification - Background Notes by International Monetary Fund Pdf
Fiscal Policy in Developing Countries by Roberto Perotti Pdf
This paper surveys fiscal policy in developing countries from the point of view of long-run growth. The first section reviews existing methodologies to estimate the effects of fiscal policy shocks and of systematic fiscal policy, with time series or with cross-sectional methods, and their applicability to developing countries. The second section surveys optimal fiscal policy in developing countries, by considering the role of the intertemporal government budget, and sustainability and solvency. It also reviews the fuzzy debate on "fiscal space" and "macroeconomic space" - and the usefulness (or lack thereof) of these terms for policy analysis. The third section asks what theory tells us about the optimal cyclical behavior of fiscal policy in developing countries. It shows that it very much depends on the assumptions about the interactions between credit market imperfections at the individual, firms, or government level, and on the supply of external funds to the country. Different sets of assumptions lead to different implications about optimal cyclical behavior. The available evidence on the cyclical behavior of fiscal policy, and possible reasons for the observed prevalence of a procyclical behavior in developing countries, is also reviewed. If one agrees that fiscal policy is indeed less countercyclical than we think is optimal, the issue is how to correct the problem. One obvious question is why government do not self-insure, i.e. why they do not accumulate assets in upturns and decumulate them in downturns. This leads to the analysis of fiscal rules and stabilization funds, in the fourth section. The last section concludes with what the author considers important research and policy questions in each part.
