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The Dominican Republic: Stabilization, Structural Reform, and Economic Growth

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Listed:
  • Mr. Jaime Cardoso
  • Mr. Philip M Young

Abstract

This paper summarizes the authorities’ stabilization efforts, how these efforts were subsequently reinforced by certain key structural reforms, and other related developments that help explain the remarkable performance of the Dominican Republic’s economy in the 1990s during which the country achieved one of the highest output growth rates in Latin America, combined with low inflation, and a much improved external debt profile. The authorities often resorted to external arrears as a means of financing the external current account deficits of the 1980s. Although rescheduling agreements were reached with the international banking community and with the Paris Club of official creditors in the mid-1980s, they met with limited success until the authorities embarked on their stabilization program of the early 1990s. Large and persistent fiscal deficits represented a significant burden for monetary policy. Although at the beginning of the decade more than half of the public deficit was financed by foreign loans, episodes of default on external and domestic government debt led to a progressive drying up of these sources of financing.

Suggested Citation

  • Mr. Jaime Cardoso & Mr. Philip M Young, 2002. "The Dominican Republic: Stabilization, Structural Reform, and Economic Growth," IMF Occasional Papers 2002/001, International Monetary Fund.
    • Handle: RePEc:imf:imfops:2002/001
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    Citations

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    Cited by:

    1. José R. Sánchez-Fung & Peter A. Prazmowski, 2004. "Ppp, Random Walks, And Uip After Interest Rate Liberalisation In A Small Developing Economy," Economics Bulletin, AccessEcon, vol. 6(1), pages 1-7.
    2. Mauricio Mayorga Martínez & Evelyn Muñoz Salas, 2004. "¿Existe disciplina de mercado en el sistema bancario costarricense?," Monetaria, CEMLA, vol. 0(3), pages 263-289, julio-sep.
    3. Gustavo Bussinger, 2004. "El canal de crédito como mecanismo de transmisión de la política monetaria en Brasil," Monetaria, CEMLA, vol. 0(3), pages 243-262, julio-sep.
    4. Sanchez-Fung, Jose R., 2004. "Modelling money demand in the Dominican Republic," Economics Discussion Papers 2004-1, School of Economics, Kingston University London.
    5. José R. Sánchez Fung, 2004. "Reglas monetarias, metas de inflación y sus aplicaciones potenciales de la República Dominicana," Monetaria, CEMLA, vol. 0(3), pages 291-323, julio-sep.
    6. Sanchez-Fung Jose R., 2003. "Monetary Policy Reaction Dynamics In A Developing Economy: Evidence For The Dominican Republic," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 3(1).
    7. Susan Pozo & Jose R. Sánchez-Fung & Amelia U. Santos-Paulino, 2010. "Economic Development Strategies in the Dominican Republic," WIDER Working Paper Series wp-2010-115, World Institute for Development Economic Research (UNU-WIDER).
    8. Hilcías Estuardo Samayoa & Héctor Augusto Valle Samayoa, 2004. "Un modelo básico de política monetaria para Guatemala," Monetaria, CEMLA, vol. 0(3), pages 223-242, julio-sep.

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