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Citation Information

Type Working Paper
Title Growth and Distributional Effects of Fiscal Reforms in Jamaica
Publication (Day/Month/Year) 2012
URL http://www.cepal.org/comercio/tpl/contenidos/Growth_Distribution_Jamaica_CGE_MEDVEDEV_PARIS.pdf
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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