Abstract
Summary The relationship between fiscal imbalances and other macroeconomic variables is complex and multifaceted. However, it remains important to understand it, not least in order to facilitate the design of appropriate policy. One central issue is whether the relationship varies across countries or groups of countries. If it does, an implication is that policy will also have to be differentiated. This paper empirically explores the relationship between fiscal imbalances and pressures in the foreign exchange (FX) market in Latin America & Caribbean (LAC) and East Asia & the Pacific (EAP) regions. Using panel data over 1970–2000, it finds that fiscal imbalances have a significant effect on FX pressures in LAC but not in EAP.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
