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Title: Fiscal sustainability and dollarization: the case of Ecuador
Author: Marí del Cristo, María Lorena
Gómez-Puig, Marta
Keywords: Política fiscal
Harmonització fiscal
Indústria petroliera
Producte interior brut
Fiscal policy
Tax harmonization
Petroleum industry and trade
Gross domestic product
Issue Date: 2016
Publisher: Taylor and Francis
Abstract: This article tries to disentangle the dynamic relationships between fiscal variables and economic activity in a small emerging economy characterized by full dollarization, namely, Ecuador. We find that fiscal policy in Ecuador seems to be sustainable, explained by its policy of debt payment through oil revenues, rather than by a fiscal discipline that dollarization is supposed to encourage. The non-oil tax revenues variable is a purely adjusting variable. This result suggests that in a dollarized country that cannot benefit from the 'seignorage' revenues, the reliance on volatile oil revenues and on smoothing tax revenues leaves the economy's fiscal sustainability vulnerable.
Note: Versió postprint del document publicat a:
It is part of: Applied Economics, 2016, vol. 48, num. 23, p. 2139-2155
Related resource:
ISSN: 0003-6846
Appears in Collections:Articles publicats en revistes (Economia)

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