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Macroeconomic Policy and Economic Performance in Developing Countries

Author

Listed:
  • Fry, M.J.

Abstract

In this article, I examine the relationship between monetary and fiscal policies in a panel of 70 developing countries. I find that the size of the government's defict and the methods by which it is financed are strongly related to monetary policy reactions to increases in both government credit and foreign assets. In particular, larger deficits and greater reliance by governments on the domestic banking system are associated with more accommodative monetary policies.

Suggested Citation

  • Fry, M.J., 1998. "Macroeconomic Policy and Economic Performance in Developing Countries," Papers 98-01, University of Birmingham - International Financial Group.
  • Handle: RePEc:fth:birmif:98-01
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    More about this item

    Keywords

    FISCAL POLICY ; MONETARY POLICY ; DEVELOPING COUNTRIES;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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