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The costs and benefits of stabilisation programmes: Some Latin American experiences

Working papers

This Working Paper’s focus is on stabilisation programmes in Latin American developing countries. The paper concentrates upon weighing the costs of stabilisation programmes in terms of, for example, output forgone and unemployment, against the benefits in terms of the relief of the immediate balance-of-payments problem and, in some cases, significant reductions in the rate of in inflation. The paper also examines the distribution of the burden of adjustment among social groups. To enable clarity when considering comparative costs and benefits, stabilisation programmes are divided in this paper into three categories: conventional programmes: monetarist programmes; and structuralist/populist programmes.

Mary Sutton