5. Has Fiscal Policy Become More Countercyclical in Latin America?
Author:
International Monetary Fund
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Language:
English
Print Publication Date:
24 Apr 2014
Keywords:
REO; commodity; emerging market; bond yield; price growth; potential GDP; cyclicality of fiscal policy; result of fiscal policy; Endogeneity of the output gap; Fiscal stance; Output gap; Automatic stabilizers; Commodity prices; Global

Abstract

For many decades, fiscal policy in Latin America has been, on average, procyclical. However, country-specific estimates for the cyclicality of fiscal policy are mostly insignificant, with only a few exceptions of clearly procyclical policy. Some countries (Brazil, Chile, Colombia, El Salvador, Mexico), meanwhile, appear to have moved toward less procyclical or more countercyclical policy in recent years. Nonetheless, other important attributes of sound fiscal policy, including fiscal sustainability, transparency, and efficiency, need to be strengthened further in many countries.

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Contributor Notes

Note: Prepared by Alexander Klemm, based on the analysis in Klemm (2014). Anayo Osueke provided excellent research assistance.
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Cover Regional Economic Outlook, May 2014, Western Hemisphere
Regional Economic Outlook, May 2014, Western Hemisphere
ISBN:
9781484360118
ISSN:
2071-4165
Publication Date:
24 Apr 2014
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781484360118.086
Pages:
82

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