Macroeconomic Policy and Economic Performance in Developing Countries

M.J. Fry

Working Papers from University of Birmingham - International Financial Group

Abstract: In this article, I examine the relationship between monetary and fiscal policies in a panel of 70 developing countries. I find that the size of the government's defict and the methods by which it is financed are strongly related to monetary policy reactions to increases in both government credit and foreign assets. In particular, larger deficits and greater reliance by governments on the domestic banking system are associated with more accommodative monetary policies.

Keywords: FISCAL POLICY; MONETARY POLICY; DEVELOPING COUNTRIES (search for similar items in EconPapers)
JEL-codes: E61 O23 (search for similar items in EconPapers)
Pages: 13 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:fth:birmif:98-01

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