Challenges of Fiscal Policy in Emerging and Developing Economies

Essays on Optimal Aid and Fiscal Policy in Developing Economies

TITLE OF DISSERTATION: ESSAYS ON OPTIMAL AID AND FISCAL POLICY IN DEVELOPING ECONOMIES Ryan Niladri Banerjee, Doctor of Philosophy, 2010 Dissertation directed by: Professor Enrique G. Mendoza Department of Economics Essay I: Which countries receive aid as insurance and why? A theory of optimal aid policy Empirical evidence shows that developing countries with opaque institutions receive procycl...

Challenges of Effective Monetary Policy in Emerging Economies

Modern monetary policy theory and practice have been heavily influenced by the experiences of developed countries, both large and small. A number of these ideas have also made their way into policymaking at central banks in emerging economies, mostly due to the absence of local intellectual alternatives. However, the realities of emerging economies are often at odds with the circumstances of de...

Fiscal policy in debt constrained economies

We study optimal fiscal policy in a small open economy (SOE) with sovereign and private default risk. The SOE’s government uses linear taxation to fund exogenous expenditures and uses public debt to inter-temporally allocate tax distortions. We characterize a class of environments in which the tax on labor goes to zero in the long run, while the tax on capital income may be non-zero, reversing ...

Optimal Fiscal Policy in Debt Constrained Economies∗

We study optimal fiscal policy in a small open economy (SOE) with sovereign default risk. The SOE’s government uses linear taxation to fund exogenous expenditures and uses public debt to inter-temporally allocate tax distortions. We characterize a class of environments in which the tax on labor goes to zero in the long run, while the tax on capital income may be non-zero, reversing the standard...

Environmental Fiscal Reform in Developing, Emerging and Transition Economies: Progress & Prospects