Costa Rica During the Global Recession: Fiscal Stimulus with Tight Monetary Policy
This paper shows that, in spite of a reasonably sized fiscal stimulus package, Costa Rica’s economy continues on a downward path, partly because fiscal policy is being offset by a tightening of monetary policy. The paper notes that the International Monetary Fund has insisted that Costa Rica’s monetary policy remain tight due to worries over inflation targets and a perceived risk of a balance of payments crisis. However, the author notes that the IMF could help prevent a balance of payments crisis through the provision of a credit line of foreign currency, as it has done, for example, in Mexico – a vastly larger economy. The paper also examines the government’s macroeconomic policies in recent years, prior to the world recession, to see what alternative policies might have done better.
|Date of creation:||Jul 2009|
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- Philip Arestis & Malcolm Sawyer, 2003.
"Reinventing fiscal policy,"
Journal of Post Keynesian Economics,
M.E. Sharpe, Inc., vol. 26(1), pages 3-25, October.
- Philip Arestis & Malcolm Sawyer, 2003. "Reinventing Fiscal Policy," General Economics and Teaching 0306004, EconWPA.
- Philip Arestis & Malcolm Sawyer, 2003. "Reinventing Fiscal Policy," Economics Working Paper Archive wp_381, Levy Economics Institute.
- International Monetary Fund, 2009. "Mexico; Arrangement Under the Flexible Credit Line: Staff Report; Staff Supplement; and Press Release on the Executive Board Discussion," IMF Staff Country Reports 09/126, International Monetary Fund.
- Jose Antonio Cordero, 2008. "Economic growth under alternative monetary regimes: inflation targeting vs real exchange rate targeting," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(2), pages 145-160.
- Gerald Epstein & Erinc Yeldan, 2008. "Inflation targeting, employment creation and economic development: assessing the impacts and policy alternatives," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(2), pages 131-144.
- Gerald Epstein & Erinc Yeldan, 2008. "Inflation Targeting, Employment Creation and Economic Development: Assessing the Impacts and Policy Alternatives," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(2), pages 129-130.
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