02994nam 2200613Ia 450 991082278750332120200520144314.01-4623-9016-11-4519-8633-51-282-39212-397866138205561-4519-0913-6(CKB)3360000000443095(EBL)3014538(SSID)ssj0000940824(PQKBManifestationID)11519299(PQKBTitleCode)TC0000940824(PQKBWorkID)10955521(PQKB)11225520(OCoLC)694141243(IMF)WPIEE2006119(MiAaPQ)EBC3014538(EXLCZ)99336000000044309520060920d2006 uf 0engur|n|---|||||txtccrFiscal discipline and exchange rate regimes evidence from the Caribbean /prepared by Rupa Duttagupta and Guillermo Tolosa1st ed.[Washington, D.C.] International Monetary Fund, Western Hemisphere Dept.20061 online resource (37 p.)IMF working paper ;WP/06/119"May 2006."1-4518-6379-9 Includes bibliographical references.""Contents""; ""I. INTRODUCTION""; ""II. FIXED EXCHANGE RATES, CURRENCY UNIONS, AND FISCAL DISCIPLINE""; ""III. EMPIRICAL ANALYSIS""; ""IV. CONCLUSION""; ""REFERENCES""This paper assesses the nature of fiscal discipline under alternative exchange rate regimes. First, it shows in a simple theoretical framework that fiscal agencies under a currency union with a fixed exchange rate can have the largest incentive to overspend or "free-ride" (compared to those under other exchange rate regimes) owing to their ability to spread the costs of overspending in terms of the inflation tax across both time-given the fixed exchange rate-and space-given the currency union. In contrast, such free-riding behavior does not arise under flexible regimes owing to the immediate inflationary impact of spending. Next, empirically, it shows that fiscal stances in countries with fixed pegs and currency unions regime demonstrate greater free-riding behavior than countries with more flexible regimes in 15 Caribbean countries during 1983-2004.IMF working paper ;WP/06/119.Fiscal policyCaribbean AreaEconometric modelsForeign exchange ratesCaribbean AreaEconometric modelsFiscal policyEconometric models.Foreign exchange ratesEconometric models.Duttagupta Rupa1610000Tolosa Guillermo1649679International Monetary Fund.Western Hemisphere Dept.MiAaPQMiAaPQMiAaPQBOOK9910822787503321Fiscal Discipline and Exchange Rate Regimes3998559UNINA