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A Broad View of Macroeconomic Stability

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  • José Antonio Ocampo

Abstract

This paper recommends a broad concept of macroeconomic stability, whereby “sound macroeconomic frameworks” include not only price stability and sound fiscal policies, but also a well-functioning real economy, sustainable debt ratios and healthy public and private sector balance sheets. These multiple dimensions imply using multiple policy instruments. The paper elaborates a framework for developing countries that involves active use of counter-cyclical macroeconomic policies (exchange rate, monetary and fiscal), together with capital management techniques (capital account regulations and prudential rules incorporating macroeconomic dimensions). It also explores the role of international financial institutions in facilitating developing countries’ use of counter-cyclical macroeconomic policies.

Suggested Citation

  • José Antonio Ocampo, 2005. "A Broad View of Macroeconomic Stability," Working Papers 1, United Nations, Department of Economics and Social Affairs.
  • Handle: RePEc:une:wpaper:1
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    File URL: http://www.un.org/esa/desa/papers/2005/wp1_2005.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ali, Amjad, 2016. "Issue of Income Inequality under the perceptive of Macroeconomic Instability: An Empirical Analysis of Pakistan," MPRA Paper 74963, University Library of Munich, Germany.
    2. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 71037, University Library of Munich, Germany.
    3. Amber Fatima & Abdul Waheed, 2014. "Economic uncertainty and growth performance: a macroeconomic modeling analysis for Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1361-1387, May.
    4. Eduardo Wiesner, 2011. "Colombia: la percepción de justicia distributiva y la demanda política por estabilidad macroeconómica," DOCUMENTOS CEDE 008739, UNIVERSIDAD DE LOS ANDES-CEDE.
    5. Ali, Amjad & Bibi, Chan, 2016. "Determinants of Social Progress and its Scenarios under the role of Macroeconomic Instability: Empirics from Pakistan," MPRA Paper 72920, University Library of Munich, Germany.
    6. José Antonio Ocampo & Stephany Griffith-Jones, 2007. "A counter-cyclical framework for a development-friendly international financial architecture," Working Papers 39, United Nations, Department of Economics and Social Affairs.

    More about this item

    Keywords

    macroeconomic stability; capital account volatility; counter-cyclical macroeconomic policies; capital management techniques; capital account regulations.;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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