Type | Working Paper |
Title | Growth and Distributional Effects of Fiscal Reforms in Jamaica |
Author(s) | |
Publication (Day/Month/Year) | 2012 |
URL | http://www.cepal.org/comercio/tpl/contenidos/Growth_Distribution_Jamaica_CGE_MEDVEDEV_PARIS.pdf |
Abstract | The Government of Jamaica introduced a series of fi scal reforms in 2009 and 2010 to combat the adverse effects of the global crisis. Th is paper offers an illustrative analysis of the potential growth and distributional impacts of these policies, as well as other potential policy changes aimed at increasing productivity and accelerating growth. The simulations are implemented with a computable general equilibri um (CGE) model for Jamaica and complemented with a micro-accounting exercise to ob tain the poverty and distributional effects. The results show that future growth and po verty reduction depend critically on the ability of the government to stay the course of recent fiscal reforms. In particular, maintaining the recent fuel tax increases or replac ing them with an equivalent set of fiscal measures and implementing the recently adopted Fisc al Responsibility Framework (FRF) will be key to improving growth performance and low ering the debt ratios. Despite the negative effects of increased taxation on incomes o f the poorer parts of the population, the acceleration in growth and the long-term improv ement in the fiscal position due to these reforms are likely to lead to lower poverty o utturns in the long run. |
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