ENGLISH

Fiscal Policy, Stabilization, and Growth: Prudence or Abstinence? (Latin American Development Forum)

By Guillermo E. Perry , Luis Servén , Rodrigo Suescun

Book information

Year
2007
ISBN
0821370847, 9780821370841, 9780821370858
DOI
10.1596/978-0-8213-7084-1
Open Library ID
OL11416970M
Language
english
Format
PDF
Filesize
2 MB (2380892 bytes)
Pages
350\354
Time added
2011-06-04 13:46:07

Description

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.

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