Macroeconomic stability in developing countries - How much is enough?

Peter Montiel and Luis Servén

No 3456, Policy Research Working Paper Series from The World Bank

Abstract: In the 1990s macroeconomic policies improved in a majority of developing countries, but the growth dividend from such improvement fell short of expectations, and a policy agenda focused on stability turned out to be associated with a multiplicity of financial crises. The authors take a retrospective look at the content and implementation of the macroeconomic reform agenda of the 1990s. They review the progress achieved with fiscal, monetary, and exchange rate policies across the developing world, and the effectiveness of the changing policy framework in promoting stability and growth. The main lesson is that slow growth and frequent crises resulted, more often than not, from shortcomings in the reform agenda of the 1990s. These shortcomings essentially concern the depth and breadth of the macroeconomic reform agenda, its attention to macroeconomic vulnerabilities, and the complementary reforms outside the macroeconomic sphere.

Keywords: Fiscal&Monetary Policy; Payment Systems&Infrastructure; Banks&Banking Reform; Economic Theory&Research; Environmental Economics&Policies; Macroeconomic Management; Economic Theory&Research; Achieving Shared Growth; Environmental Economics&Policies; Inequality (search for similar items in EconPapers)
Date: 2004-11-01
New Economics Papers: this item is included in nep-dev, nep-ifn, nep-lam and nep-mac
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Citations: View citations in EconPapers (7)

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Journal Article: Macroeconomic Stability in Developing Countries: How Much Is Enough? (2006)
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