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Fiscal deficit reduction programs in developing countries: Stabilization versus growth in the presence of credit rationing

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  • John T. Cuddington

    (Georgetown University)

Abstract

This paper presents a model for analyzing potential conflicts between short-run output and employment effects and medium-run growth effects of various fiscal actions. In the model, both firms and households are intertemporal optimizers; short-run wage stickiness and interest rate controls generate macroeconomic disequilibrium. The analysis focuses on the consequences of various government expenditure or deficit reduction policies.

Suggested Citation

  • John T. Cuddington, 1992. "Fiscal deficit reduction programs in developing countries: Stabilization versus growth in the presence of credit rationing," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 7(1), pages 31-51.
    • Handle: RePEc:emx:esteco:v:7:y:1992:i:1:p:31-51
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/306/309
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    References listed on IDEAS

    as
    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. repec:bla:scandj:v:84:y:1982:i:2:p:165-92 is not listed on IDEAS
    3. Steigum, Erling, Jr, 1983. "Capital Shortage and Classical Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 461-473, June.
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