Title: Hiccups for hipcs?
First published: 2001
Description: "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"--National Bureau of Economic Research web site.
Subjects: Monetary policy, Debt relief, Fiscal policy, Conditionality (International relations)
Places: Developing countries
LC classification: HB1