ABSTRACT
Fiscal policies have a benign role for economic growth in the region, namely to provide a stable macro environment for investment. The changed environment o f liquidity constraints on external borrowing and slowdown in output growth has led to new attention being directed towards the role and contribution o f fiscal policy to reviving growth in the region. However, there is considerable debate on this issue; as noted by Gamaut (1998, p. 19) in a recent review o f the Asian crisis, ‘the main unresolved questions o f macroeconomic policy relate to adjustments o f the fiscal settings’.
