Stabilisation and Growth: Some Notes on the Role of Credible Policies

Download

E Book

Publication

The IPS Publication is available for sale from the IPS premises at No. 100/20, Independence Avenue, Colombo 07 (Tel: +94-11-2143107, +94-11-2143100), and bookshops island-wide. For more details, contact the IPS Publications Unit.

ISBN

Published Year

July 1990

Price

US$ 10

It is commonplace today to hear many observers and policymakers decrying stabilisation as both ‘bad’ and inimical to growth. The perception has clouded important issues and, in key instances, frustrated the formulation of economic policies appropriate for self-sustaining growth. In my remarks today, I intend to argue that (i) stabilisation is usually a prerequisite to growth; (ii) stabilisation policy must be visibly credible to be effective; (iii) it is non-credible stabilisation that is either self-defeating or increases the costs of adjustment; and (iv) elements of a credible policy are well known, usually require greater attention to the quality of fiscal adjustment, an should guide adjustment policy.

Table of Contents

  • Why Stabilize?
  • A Framework for Stabilisation
  • Credible Versus Non-Credible Stabilisation
  • Conclusions

by Anoop Singh