Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53056
Authors: 
Jha, Raghbendra
Year of Publication: 
2001
Series/Report no.: 
WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2001/71
Abstract: 
This paper considers some aspects of the effects of fiscal policy on macroeconomic adjustment in developing countries. First, the paper reviews the notion of the fiscal deficit in the particular context of developing countries. It then spells out the conditions under which the internal and external debts are sustainable and points out the role of the “twin deficits”. The paper then presents some evidence on the sustainability of the internal and external deficits in the context of some developing countries. Finally the paper develops the theme of endogeneity of money supply to fiscal policy and international capital flows and points out the difficulties faced by stabilization policy under these conditions.
Subjects: 
fiscal policy
domestic debt
foreign debt
JEL: 
O23
H20
H62
Document Type: 
Working Paper

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