The Effects of Industrial Country Fiscal Policies on Developing Countries in the 1980s

Part of the Central Issues in Contemporary Economic Theory and Policy book series (CICETP)


There has been much empirical macroeconomic research on the current account and fiscal linkages among the industrial countries (e.g. Bryant, Henderson et Al. [6]), but much less empirical analysis using multicountry general equilibrium models of the linkages between the industrial countries (the north) and the developing countries (the south) (1). In this paper, we make use of two recently developed global models, the IMF’s MULTIMOD (Masson, Symansky, et Al. [33]) and INTERMOD (Helliwell, Meredith, et Al. [23]), to spell out some of main channels (2). We shall assess the extent to which fiscal policies in the industrial countries during the first half of the 1980s contributed to the growth, debt, and debt-servicing experience of the developing countries. The fiscal policies of the major industrial countries have received much attention, but primarily as concerns their effects on industrial countries, e.g. on their current balances, exchange rates, and interest rates (Blanchard and Summers [2], Branson [4], Sachs [35], Masson and Knight [32], Helkie and Hooper [21]) (3). Here, the focus is on their impact on developing countries.


Interest Rate Monetary Policy Industrial Country Current Account Fiscal Policy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© SIPI Srl. Rivista di Politica Economica 1993

Authors and Affiliations

  1. 1.International Monetary FundUSA
  2. 2.University of British ColumbiaCanada

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