Growth, Governance, and Fiscal Policy Transmission Channels in Low-Income Countries [electronic resource] Kojo, Naoko C..
- Washington, D.C. : International Monetary Fund, 2003.
- IMF eLibrary
IMF Working Papers; Working Paper No. 03/237.
IMF Working Papers; Working Paper No. 03/237
- Government document
1 online resource (39 p.)
- Local subjects:
- Budget composition.
Composition of expenditure.
Composition of government expenditure.
Composition of government spending.
Composition of public spending.
Expansionary fiscal contraction.
Expansionary fiscal contractions.
Fiscal affairs department.
Fiscal deficit variable.
Fiscal policy variables.
Government budget deficits.
Increase in capital spending.
Public Expenditures, Investment, and Finance.
Reduction in public spending.
Reductions in public spending.
Size of government spending.
Taxes on labor.
Central African Republic.
Macedonia, former Yugoslav Republic of.
- Private investment is the principal transmission channel through which fiscal policy affects growth in high-income countries. In low-income countries, governance and also other considerations suggest that the primary channel is factor productivity. Empirical results reported in this paper confirm this expectation: in low-income countries, factor productivity is some four times more effective than investment as a channel for increasing growth through fiscal policy. Although the private investment response to fiscal contraction may be minor, high-deficit, low-income countries can nonetheless benefit from a reduction in unsustainable fiscal deficits because of governance-related factor productivity responses that increase growth.
- Description based on print version record.
- Baldacci, Emanuele.
Hillman, Arye L.
Kojo, Naoko C.
- Other format:
- Print Version:
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- Access Restriction:
- Restricted for use by site license.
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