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Policies to reduce instability

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  • Luis F. Brunstein

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    Abstract

    The current stabilization policy adopted by many Latin American countries demands a restrictive monetary policy coupled with a conservative fiscal policy. While these policies have been adapted to suture financial fragilities, they have not been able to significantly improve the levels of structural poverty and unemployment, rendering the approach vulnerable to political risk. By exploring the case of Argentina, this paper argues that the presence of such risk forces the government to adopt a heterodox, eclectic and very flexible approach to policy formation that may maximize its chances to achieve long term social objectives. La actual política de estabilización adoptada por muchos países latinoamericanos exige una política monetaria restrictiva aunada a una política fiscal conservadora. Aunque estas políticas han sido adaptadas para aliviar fragilidades financieras, no han sido capaces de mejorar significativamente los niveles de pobreza y desempleo estructurales, lo cual hace que el enfoque sea vulnerable a riesgos políticos. Mediante el estudio del caso de Argentina, este trabajo argumenta que la presencia de estos riesgos obliga al gobierno a adoptar un heterodoxo, ecléctico y muy flexible sistema de formulación de políticas que puede maximizar sus posibilidades de lograr objetivos sociales de largo plazo.

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    File URL: http://ciruelo.uninorte.edu.co/pdf/economia_caribe/1/1_Polices%20to%20reduce.pdf
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    Bibliographic Info

    Article provided by UNIVERSIDAD DEL NORTE in its journal Revista de Economía del Caribe.

    Volume (Year): (2008)
    Issue (Month): ()
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    Handle: RePEc:col:000382:007100

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