Structural adjustment is an economy wide adjustment effort aimed at allocating resources better. The author contends that functioning markets and a low, stable inflation rate are two macroeconomic preconditions for implementing structural adjustment. He further concludes that in highly distorted economies the market system must be restored before adjustment efforts are undertaken. Fiscal deficits are probably a key determinant of trade deficits - particularly when the fiscal deficit is financed abroad. This paper is concerned with the identification of macroeconomic policies consistent with the long run sustainability of a stable market framework or with changes that may be required as a consequence of the implementation of the structural adjustment program. It is not directly concerned with issues of short run stabilization, although those issues, particularly that of the timing of policies are mentioned whenever relevant.
Details
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Author
Rodriguez, Carlos Alfredo
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Document Date
1989/08/31
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Document Type
Policy Research Working Paper
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Report Number
WPS247
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Volume No
1
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Total Volume(s)
1
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Disclosure Date
2010/07/01
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Doc Name
Macroeconomic policies for structural adjustment
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Keywords
Structural adjustment; Fiscal policy; Deficits; Macroeconomics; Exchange rates; Balance of trade; Trade expansion; Market economy
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Citation
Rodriguez, Carlos Alfredo
Macroeconomic policies for structural adjustment (English). Policy, Planning and Research working papers ; no. WPS 247. Macroeconomic adjustment and growth Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/598021468764982216/Macroeconomic-policies-for-structural-adjustment