A Broad View of Macroeconomic Stability

Jose Antonio Ocampo

Working Papers from United Nations, Department of Economics and Social Affairs

Abstract: This paper recommends a broad concept of macroeconomic stability, whereby “sound macroeconomic frameworks” include not only price stability and sound fiscal policies, but also a well-functioning real economy, sustainable debt ratios and healthy public and private sector balance sheets. These multiple dimensions imply using multiple policy instruments. The paper elaborates a framework for developing countries that involves active use of counter-cyclical macroeconomic policies (exchange rate, monetary and fiscal), together with capital management techniques (capital account regulations and prudential rules incorporating macroeconomic dimensions). It also explores the role of international financial institutions in facilitating developing countries’ use of counter-cyclical macroeconomic policies.

Keywords: macroeconomic stability; capital account volatility; counter-cyclical macroeconomic policies; capital management techniques; capital account regulations. (search for similar items in EconPapers)
JEL-codes: E44 E61 E63 F41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2005-10
New Economics Papers: this item is included in nep-cba, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:une:wpaper:1

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