Designing Monetary and Fiscal Policy in Low-Income Countries

Jan Martijn, C. Di Bella (), Shamsuddin Tareq, Benedict Clements and Abebe Aemro Selassie

No 2006/005, IMF Occasional Papers from International Monetary Fund

Abstract: Macroeconomic outcomes in low-income countries (LICs) have improved markedly in recent years, but important questions remain regarding possible adjustments in the design of IMF-supported programs in such countries. This paper draws on a review of the literature as well as the experience of 15 LICs that have attained some degree of macroeconomic stability to discuss, for example, the appropriate target range for inflation in shock-prone LICs; whether countries should use fiscal space to cut excessive tax burdens, reduce high debt levels, or raise public spending; and how the effectiveness of public expenditures can be improved.

Keywords: OP; debt; deficit; The PRGF; debt sustainability consideration; economic growth rate; public expenditure management systems; IMF-World Bank cooperation; double-digit inflation; stabilization country; Inflation; Monetary base; Global (search for similar items in EconPapers)
Pages: 58
Date: 2006-07-19
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Citations: View citations in EconPapers (7)

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