How to put together the fiscal puzzle? New sustainability indicators

CODE: B-119
EDITOR(s): Talvi, Ernesto , Végh, Carlos A.
PUBLISHED: January 2000


Latin American countries suffer from severe macroeconomic volatility. What is the link between this volatility and the sustainability of fiscal policy? Does the cause and effect relationship run only from macro to fiscal or is it a two-way street? ¿Como armar el rompecabezas fiscal? examines this relationship in the context of a search for appropriate indicators of fiscal policy sustainability. The power of predictability is a formidable asset in economics, and the methodology laid out in this book enjoys this distinction. In addition to providing an insightful account of recent fiscal history in six Latin American countries, it offers a conceptual framework that accurately predicted the fiscal breakdowns in both Brazil and Colombia.

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