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Give 5 economic or political reasons why macroeconomic policies are ineffective in third world
countries?
Solution
The third world countries are the developing countries such as of Africa, Asia, Latin America
and Oceania.
The focus of macroeconomic policies in developing countries has shifted over recent decades.
Until the 1970s, these policies were mostly embedded in broad, growth-oriented national
development strategies. However, the severe macroeconomic instability that many developing
countries have faced since the 1980s has narrowed the focus of macroeconomic policies to
lowering inflation and avoiding major fiscal and external imbalances.
Recent economic crises in East Asia and Latin America have once again raised serious questions
about the conduct of macroeconomic policy in developing countries.
Macroeconomics policy instruments broadly include monetary policy, fiscal policy and exchange
rate policy.

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Give 5 economic or political reasons why macroeconomic policies are .pdf

  • 1. Give 5 economic or political reasons why macroeconomic policies are ineffective in third world countries? Solution The third world countries are the developing countries such as of Africa, Asia, Latin America and Oceania. The focus of macroeconomic policies in developing countries has shifted over recent decades. Until the 1970s, these policies were mostly embedded in broad, growth-oriented national development strategies. However, the severe macroeconomic instability that many developing countries have faced since the 1980s has narrowed the focus of macroeconomic policies to lowering inflation and avoiding major fiscal and external imbalances. Recent economic crises in East Asia and Latin America have once again raised serious questions about the conduct of macroeconomic policy in developing countries. Macroeconomics policy instruments broadly include monetary policy, fiscal policy and exchange rate policy.