This paper provides new empirical evidence on macroeconomic policies and results in Latin America and the Caribbean (LAC), based on recent data for the region and the world at large. Our results show that: (i) both monetary and fiscal policies are counter- (pro-) cyclical when credibility is...

Optimal stabilization policy is counter-cyclical, aiming at keeping output close to its potential. However it has been traditionally argued that emerging economies are unable to adopt counter-cyclical monetary and fiscal policy. Here we argue that the cyclical properties of macroeconomic...

This paper provides an empirical evaluation of external vulnerability using panel data methods for a worldwide sample of countries. Controlling for domestic conditions, the paper examines the growth volatility effects of outcome measures of trade and financial openness as well as four types of...

Money targeting (MT) was a highly popular monetary regime among central banks in both industrial and developing countries during the 1980s and 1990s. This paper presents a comprehensive empirical exploration of the possible explanations of why countries choose (and abandon) a MT regime. The...

Macroeconomic policies are designed to stabilize business cycle fluctuations. Usually, fiscal and monetary policies in industrial countries have been expansionary in response to weak domestic conditions. However, the cyclical properties of fiscal policies are a much more disputed issue among...