Abstract

http://ssrn.com/abstract=1972785
 


 



Fiscal Policy in Latin America: Countercyclical and Sustainable?


Christian Daude


Inter-American Development Bank (IADB)

Ángel Melguizo


OECD Development Centre

Alejandro Neut


Massachusetts Institute of Technology (MIT) - Department of Economics

2011

Economics: The Open-Access, Open-Assessment E-Journal, Vol. 5, 2011-14

Abstract:     
This paper analyses fiscal policy for several economies in Latin America, from the early nineties to the 2009 crisis. We present original estimates of cyclically-adjusted public revenues for Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Peru and Uruguay implementing the standardised OECD methodology and extending it to include commodity cycles, which have a direct and significant effect on the fiscal balance of several Latin American countries. Based on these estimates, we evaluate the size of automatic tax stabilisers and the cyclicality of discretionary fiscal policy. Additionally, we highlight the uncertainty stemming from the estimation of the output gap, due to large and simultaneous cyclical, temporary and permanent shocks in several Latin American economies.

Number of Pages in PDF File: 31

Keywords: fiscal policy, business cycle, public finances

JEL Classification: E62, H30, H60

Accepted Paper Series





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Date posted: December 15, 2011  

Suggested Citation

Daude, Christian and Melguizo, Ángel and Neut, Alejandro, Fiscal Policy in Latin America: Countercyclical and Sustainable? (2011). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 5, 2011-14. Available at SSRN: http://ssrn.com/abstract=1972785 or http://dx.doi.org/10.5018/economics-ejournal.ja.2011-14

Contact Information

Christian Daude (Contact Author)
Inter-American Development Bank (IADB) ( email )
1300 New York Avenue NW
Washington, DC 20577
United States
Ángel Melguizo
OECD Development Centre ( email )
2 rue Andre Pascal
Paris, 75016
France
+33601055334 (Phone)

Alejandro Neut
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
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