Macroeconomic Policy for Growth and Poverty Reduction

A fundamental shift in macroeconomic policy thinking is taking place. This shift opens a space for implementing policies that promote growth and reduce poverty in developing countries. In this paper, policies for post-conflict and resource-rich economies are outlined. Fiscal policy would focus on revenue mobilization, scaling-up public investment, and preventing over-heating. Monetary policies would revive the financial sector, prevent inflationary pressures and stimulate private sector investment. Exchange rate policies should focus on achieving slow depreciation and maintaining international competitiveness. These policies should not be considered in isolation from each other, but in coordination.