The Role of Fiscal Policy in Sustainable Stabilization: Evidence From Latin America

Author/Editor:

Gerd Schwartz ; Teresa Ter-Minassian

Publication Date:

August 1, 1997

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper reviews the role of fiscal policy in a number of stabilization programs in Latin America since the early 1980s. The paper highlights the importance of sustainable fiscal adjustment in stabilization efforts, and discusses the main issues that arise in this context. By reviewing the Latin American experience, it is argued that responsibility for failed stabilization attempts can be traced to four main factors: inconsistent policy mixes; excessive reliance on temporary factors of improvement in the fiscal accounts; failure to implement fundamental fiscal reforms; and lack of complementary structural reforms.

Series:

Working Paper No. 1997/094

Subject:

Expenditure Fiscal consolidation Fiscal policy Inflation Prices Revenue administration

English

Publication Date:

August 1, 1997

ISBN/ISSN:

9781451950786/1018-5941

Stock No:

WPIEA0941997

Pages:

33

Please address any questions about this title to publications@imf.org