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Fiscal Policy in Latin America: Lessons and Legacies of the Global Financial Crisis

Author

Listed:
  • Oya Celasun
  • Mr. Francesco Grigoli
  • Ms. Keiko Honjo
  • Mr. Javier Kapsoli
  • Mr. Alexander D Klemm
  • Mr. Bogdan Lissovolik
  • Jan Luksic
  • Ms. Marialuz Moreno Badia
  • Ms. Joana Pereira
  • Mr. Marcos Poplawski Ribeiro
  • Baoping Shang
  • Ms. Yulia Ustyugova

Abstract

Latin America’s bold fiscal policy reaction to the global financial crisis was hailed as a sign that the region had finally overcome its procyclical fiscal past. However, most countries of the region have not yet rebuilt their fiscal space, despite buoyant commodity revenues and relatively strong growth in the aftermath of the crisis. Using the experience of Brazil, Chile, Colombia, Mexico, Peru, and Uruguay, this paper examines the lessons and legacies of the crisis by addressing the following questions, among others: How much did the 2009 fiscal stimulus help growth? What shortcomings were revealed in the fiscal policy frameworks? What institutional reforms are now needed to provide enduring anchors for fiscal policy? How much rebuilding of buffers is needed going forward?

Suggested Citation

  • Oya Celasun & Mr. Francesco Grigoli & Ms. Keiko Honjo & Mr. Javier Kapsoli & Mr. Alexander D Klemm & Mr. Bogdan Lissovolik & Jan Luksic & Ms. Marialuz Moreno Badia & Ms. Joana Pereira & Mr. Marcos Pop, 2015. "Fiscal Policy in Latin America: Lessons and Legacies of the Global Financial Crisis," IMF Staff Discussion Notes 2015/006, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2015/006
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    Citations

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    Cited by:

    1. Guerguil, Martine & Mandon, Pierre & Tapsoba, René, 2017. "Flexible fiscal rules and countercyclical fiscal policy," Journal of Macroeconomics, Elsevier, vol. 52(C), pages 189-220.
    2. Loayza,Norman V. & Pennings,Steven Michael, 2020. "Macroeconomic Policy in the Time of COVID-19 : A Primer for Developing Countries," Research and Policy Briefs 147291, The World Bank.
    3. Norman V. Loayza & Steven Pennings, 2020. "Macroeconomic Policy in the Time of COVID-19," World Bank Publications - Reports 33540, The World Bank Group.
    4. Ardanaz, Martín & Corbacho, Ana & Gonzales, Alberto & Tolsa Caballero, Nuria, 2015. "Structural Fiscal Balances in Latin America and the Caribbean: New Dataset and Estimations," IDB Publications (Working Papers) 6989, Inter-American Development Bank.
    5. Liu, Kai & Poplawski-Ribeiro, Marcos, 2015. "Short- and Long-Run Fiscal Elasticities: International Evidence," MPRA Paper 65950, University Library of Munich, Germany.
    6. Grechyna, Daryna, 2017. "Public Policy Against Political Frictions," MPRA Paper 76396, University Library of Munich, Germany.
    7. Enrique Alberola & Iván Kataryniuk & Ángel Melguizo & René Orozco, 2018. "Fiscal Policy and the Cycle in Latin America: the Role of Financing Conditions and Fiscal Rules," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 36(85), pages 101-116, November.
    8. Combes, Jean-Louis & Minea, Alexandru & Sow, Moussé, 2017. "Is fiscal policy always counter- (pro-) cyclical? The role of public debt and fiscal rules," Economic Modelling, Elsevier, vol. 65(C), pages 138-146.

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