The macroeconomics of public sector deficits : a synthesis
Fiscal deficits have been at the forefront of macroeconomic adjustment in the 1980s, both in developing and developed countries. Fiscal deficits were blamed in good part for the assortment of ills that beset developing countries in the 1980s: over-indebtedness leading to the debt crisis beginning in 1982, high inflation, and poor investment and growth performance. This paper will examine the evidence for the macroeconomic effects of fiscal deficits, using the results of a set of ten case studies done for the Bank research project,"The Macroeconomics of Public Sector Deficits."The ten cases were Argentina, Chile, Colombia, Cote d'Ivoire, Ghana, Morocco, Mexico, Pakistan, Thailand and Zimbabwe. The authors first present a summary of the stylized facts on fiscal adjustment. Then the results are presented of the decomposition of the deficit in the case studies. The results of the case studies are then used to relate deficits to macro economic imbalances: first by analyzing the relationship of deficits to private consumption and investment; and second by examining the relationship of deficits to external imbalances. While macroeconomic imbalances are clearly interrelated, the authors assume the effects of such an interrelationship are small and use a sequence of partial equilibrium analysis of each type of imbalance.
|Date of creation:||31 Oct 1991|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barro, R.J. & Martin, X.S., 1990.
"World Real Interest Rates,"
RCER Working Papers
227, University of Rochester - Center for Economic Research (RCER).
- Aschauer, David Alan, 1989.
"Is public expenditure productive?,"
Journal of Monetary Economics,
Elsevier, vol. 23(2), pages 177-200, March.
- Reinhart, Carmen & Khan, Mohsin, 1989.
"Private investment and economic growth in developing countries,"
13655, University Library of Munich, Germany.
- Khan, Mohsin S. & Reinhart, Carmen M., 1990. "Private investment and economic growth in developing countries," World Development, Elsevier, vol. 18(1), pages 19-27, January.
- Robert E. Lucas Jr. & Nancy L. Stokey, 1984.
"Money and Interest in Cash-In-Advance Economy,"
628, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages -.
- Carl E. Walsh, 1984. "Optimal Taxation by the Monetary Authority," NBER Working Papers 1375, National Bureau of Economic Research, Inc.
- Corbo, Vittorio & Schmidt-Hebbel, Klaus, 1991.
"Public policies and saving in developing countries,"
Journal of Development Economics,
Elsevier, vol. 36(1), pages 89-115, July.
- Corbo, Vittorio & Schmidt-Hebbel, Klaus, 1991. "Public policies and saving in developing countries," Policy Research Working Paper Series 574, The World Bank.
- Schmidt-Hebbel, Klaus & Webb, Steven B & Corsetti, Giancarlo, 1992.
"Household Saving in Developing Countries: First Cross-Country Evidence,"
World Bank Economic Review,
World Bank Group, vol. 6(3), pages 529-547, September.
- Schmidt-Hebbel, Klaus & Webb, Steven B. & Corsetti, Giancarlo, 1991. "Household saving in developing countries : first cross-country evidence," Policy Research Working Paper Series 575, The World Bank.
- N. Gregory Mankiw, 1987.
"The Optimal Collection of Seigniorage: Theory and Evidence,"
NBER Working Papers
2270, National Bureau of Economic Research, Inc.
- Mankiw, N. Gregory, 1987. "The optimal collection of seigniorage : Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 327-341, September.
- Carlos A. Rodríguez, 1990.
"The External Effects of Public Sector Deficits,"
CEMA Working Papers: Serie Documentos de Trabajo.
70, Universidad del CEMA.
- Rama, Martin, 1990. "Empirical investment equations in developing countries," Policy Research Working Paper Series 563, The World Bank.
- Haque, Nadeem U. & Montiel, Peter, 1991. "The macroeconomics of public sector deficits : the case of Pakistan," Policy Research Working Paper Series 673, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:775. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.