Abstract
Low levels of economic development constrain fiscal and monetary policy in several ways. Few developing countries are able to raise much direct tax revenue, and so must rely on other sources of funding, including seigniorage. Institutional constraints often lead to a high risk of hyperinflation and currency crises. Credible, effective institutions can be created with appropriate outside help, but there are few examples of this in practice.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Fielding, D. (2008). Fiscal and Monetary Policies in Developing Countries. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_347-2
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DOI: https://doi.org/10.1057/978-1-349-95121-5_347-2
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Latest
Fiscal and Monetary Policies in Developing Countries- Published:
- 22 March 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_347-2
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Original
Fiscal and Monetary Policies in Developing Countries- Published:
- 09 November 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_347-1