Government spending at the zero lower bound (ZLB) is not necessarily welfare enhancing, even when its output multiplier is large. When government spending provides direct utility to the household, its optimal level is at most 0.5-1 percent of GDP for recessions of -4 percent; the numbers are...

(Disponible en idioma inglés únicamente) América Latina es inestable de dos a tres veces más que las economías industrializadas. Es más inestable que cualquier región distinta de África y el Medio Oriente. El acceso de América Latina a los mercados financieros internacionales es...

Latin America is volatile--about two to three times as volatile as the industrial economies. It is more volatile than any region other than Africa and the Middle East. Latin America`s access to international financial markets is sporadic, and often disappears just when it would be most valuable.

This paper studies the effects of fiscal policy on GDP, prices and interest rates in 5 OECD countries, using a structural Vector Autoregression approach. Its mains results can be summarized as follows; 1) The effects of fiscal policy on GDP and its components have become substantially weaker in...

We estimate the effects of fiscal policy on the labor market in US data. An increase in government spending of 1 percent of GDP generates output and unemployment multipliers respectively of about 1.2 per cent (at one year) and 0.6 percentage points (at the peak). Each percentage point increase...

In the last two decades the economic policy of several developing countries has often been characterized by perverse cycles of unsustainable policies and attempts at stabilization. A common feature of models designed to show how these delays in stabilizations can be explained in a way that is...

In several countries policymakers are striving to improve the budget balance. Trivially, this can be done by raising taxes and/or cutting expenditures. But the two strategies are not equivalent. In this paper, we investigate several issues referring to the relationship between the fiscal stance,...

This paper presents a model where income distribution and redistributive fiscal policy interact to affect the budget deficit and the pattern of net borrowing of a country. According to the standard representative agent paradigm, a small open economy should smooth consumption by borrowing from...