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A Broad View of Macroeconomic Stability

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  • José Antonio Ocampo

Abstract

This paper recommends a broad concept of macroeconomic stability, whereby “sound macroeconomic frameworks” include not only price stability and sound fiscal policies, but also a well-functioning real economy, sustainable debt ratios and healthy public and private sector balance sheets. These multiple dimensions imply using multiple policy instruments. The paper elaborates a framework for developing countries that involves active use of counter-cyclical macroeconomic policies (exchange rate, monetary and fiscal), together with capital management techniques (capital account regulations and prudential rules incorporating macroeconomic dimensions). It also explores the role of international financial institutions in facilitating developing countries’ use of counter-cyclical macroeconomic policies.

Suggested Citation

  • José Antonio Ocampo, 2005. "A Broad View of Macroeconomic Stability," Working Papers 1, United Nations, Department of Economics and Social Affairs.
    • Handle: RePEc:une:wpaper:1
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    Cited by:

    1. José Antonio Ocampo, 2006. "Market, Social Cohesion, and Democracy," Working Papers 9, United Nations, Department of Economics and Social Affairs.
    2. repec:ilo:ilowps:468522 is not listed on IDEAS
    3. Ocampo, José Antonio & Parra, María Angela, 2007. "The dual divergence: growth successes and collapses in the developing world since 1980," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1938.
    4. Vega, Jorge, 2013. "Propuesta de un indicador de estabilidad macroeconómica," Revista Moneda, Banco Central de Reserva del Perú, issue 156, pages 42-46.
    5. Jomo Kwame Sundaram, 2016. "Free Trade Agreements, Trade Policy and Multilateralism," Development, Palgrave Macmillan;Society for International Deveopment, vol. 59(1), pages 40-47, June.
    6. Ali, Amjad, 2016. "Issue of Income Inequality under the perceptive of Macroeconomic Instability: An Empirical Analysis of Pakistan," MPRA Paper 74963, University Library of Munich, Germany.
    7. NAPO, Fousséni, 2018. "Capital humain, productivité manufacturière et croissance économique dans les pays de l’UEMOA [Human capital, manufacturing productivity and economic growth in WAEMU countries]," MPRA Paper 89450, University Library of Munich, Germany, revised 12 Oct 2018.
    8. Vos, Rob & Inoue, Keiji & Sánchez, Marco V., 2007. "Constraints to achieving the MDGs through domestic resource mobilization," Conference papers 331653, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 71037, University Library of Munich, Germany.
    10. Amber Fatima & Abdul Waheed, 2014. "Economic uncertainty and growth performance: a macroeconomic modeling analysis for Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1361-1387, May.
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    15. Christian E. Weller & Ghazal Zulfiqar, 2013. "Financial Market Diversity and Macroeconomic Stability," Working Papers wp332, Political Economy Research Institute, University of Massachusetts at Amherst.
    16. Costa Junior, Celso Jose, 2012. "Institutional Barrier and the World Income Distribution," MPRA Paper 45633, University Library of Munich, Germany.
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    22. José Antonio Ocampo & Stephany Griffith-Jones, 2007. "A counter-cyclical framework for a development-friendly international financial architecture," Working Papers 39, United Nations, Department of Economics and Social Affairs.
    23. repec:ilo:ilowps:459069 is not listed on IDEAS
    24. Shari Spiegel, 2007. "Macroeconomics and Growth Policies," Policy Notes 1, United Nations, Department of Economics and Social Affairs.

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    More about this item

    Keywords

    macroeconomic stability; capital account volatility; counter-cyclical macroeconomic policies; capital management techniques; capital account regulations.;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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