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| dc.title | Dealing with the Dutch Disease: Fiscal Rules and Macro-Prudential Policies |
| dc.contributor.author | García-Cicco, Javier |
| dc.contributor.author | Kawamura, Enrique |
| dc.contributor.orgunit | Department of Research and Chief Economist |
| dc.coverage | Chile |
| dc.date.available | 2015-07-23T00:00:00 |
| dc.date.issue | 2015-07-16T00:00:00 |
| dc.description.abstract | This paper evaluates from a welfare perspective three policy alternatives for dealing with Dutch disease problems originating from cyclical movements in commodity prices: fiscal rules for government expenditures, capital controls, and taxes on domestic lending. A DSGE model of a small open economy is developed, with a sectoral decomposition that features three distinctive characteristics: financial frictions, a learning-by-doing externality in the industrial sector, and a fraction of households being non-Ricardian (credit constrained). The model is calibrated using Chilean data. For each policy tool, optimal simple rules are analyzed from a welfare (Ramsey) perspective, describing how different households rank the several policy alternatives, and studying how each of the models features shapes the optimal policy design. A general conclusion of the analysis is that the included Dutch disease inefficiencies are of quantitatively limited relevance in analyzing the desirability of these policies from a welfare perspective. |
| dc.format.extent | 44 |
| dc.identifier.doi | http://dx.doi.org/10.18235/0011700 |
| dc.identifier.url | https://publications.iadb.org/publications/english/document/Dealing-with-the-Dutch-Disease-Fiscal-Rules-and-Macro-Prudential-Policies.pdf |
| dc.language.iso | en |
| dc.medium | Adobe PDF |
| dc.publisher | Inter-American Development Bank |
| dc.subject | Fiscal Management |
| dc.subject | Policy Evaluation |
| dc.subject | Fiscal Policy |
| dc.subject | Taxation |
| dc.subject | Government Budget |
| dc.subject.jelcode | F41 - Open Economy Macroeconomics |
| dc.subject.keywords | Dutch Disease;Capital controls;Macro-prudential policies;Fiscal rules;Fiscal procyclicality |
| dc.type | Working Papers |
| idb.identifier.pubnumber | Working Papers |
| idb.operation | RG-K1198 |