We consider a model in which the level of taxes and seignorage are too low to finance government expenditures and debt service. Government debt will therefore grow without bound, implying the eventual need to change policy. Starting with utility maximization, we analyze the effect of the...

We consider a model in which the level of taxes and seignorage are too low to finance government expenditures and debt service. Government debt will therefore grow without bound, implying the eventual need to change policy. Starting with utility maximization, we analyze the effect of the...

This paper provides a synthesis of the four papers on the Latin American and Caribbean economies: Brazil, Chile, Costa Rica, and the Dominican Republic. It focuses on the following themes: macroeconomic stabilization and fiscal challenges, poverty and inequality, and the use of natural resources...