Hiccups for HIPCs? / Craig Burnside, Domenico Fanizza.

Format:

Book

Author/Creator:

Burnside, Craig.

Contributor:

National Bureau of Economic Research.

Fanizza, Domenico.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10903.

NBER working paper series no. w10903

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2004.

Summary:

In this paper we discuss fiscal and monetary policy issues facing heavily-indebted poor countries (HIPCs) who receive debt reduction via the enhanced HIPC initiative. This debt relief program is distinguished from previous ones by its conditionality: freed resources must be used for poverty reduction. We argue that (i) this conditionality severely limits the extent to which the initiative provides significant debt relief; (ii) depending on the response of monetary policy to an increase in social spending there could be a short-run increase in inflation in HIPC countries and (iii) the keys to long-run fiscal sustainability in the HIPCs are significant fiscal reforms by their governments, and the effectiveness of their poverty reduction programs in raising growth.

Notes:

Print version record

November 2004.