Mexico Needs a Fiscal Twist : Response to Covid-19 and Beyond /
Mexico's fiscal response to the pandemic has been modest compared to its peers, reflecting the authorities' desire to not issue new debt for spending. This approach, however, risks a more severe recession and a weaker economic recovery, with further costs in the future. Balancing the need...
|a Mexico Needs a Fiscal Twist :
|b Response to Covid-19 and Beyond /
|c Swarnali Hannan, Keiko Honjo, Mehdi Raissi.
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|a Washington, D.C. :
|b International Monetary Fund,
|c 2020.
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|a 1 online resource (33 pages)
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|a IMF Working Papers
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|a <strong>Off-Campus Access:</strong> No User ID or Password Required
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|a <strong>On-Campus Access:</strong> No User ID or Password Required
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|a Electronic access restricted to authorized BRAC University faculty, staff and students
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|a Mexico's fiscal response to the pandemic has been modest compared to its peers, reflecting the authorities' desire to not issue new debt for spending. This approach, however, risks a more severe recession and a weaker economic recovery, with further costs in the future. Balancing the need for stronger near-term fiscal support for the people and the recovery against medium-term discipline, this paper lays out an alternative strategy. We show that credibly announcing a pro-growth and inclusive medium-term fiscal reform upfront-including increased tax capacity, higher public investment and strengthened social safety nets-would open space for larger short-term support and close medium-term fiscal gaps. Model simulations suggest that this package would boost output, limit lasting economic damage from the pandemic, and put debt trajectory on a declining path in the medium term as tax reforms pay off and risk premia decline.
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|a Mode of access: Internet
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|a Honjo, Keiko.
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|a Raissi, Mehdi.
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|a IMF Working Papers; Working Paper ;
|v No. 2020/215
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|z Full text available on IMF
|u http://elibrary.imf.org/view/journals/001/2020/215/001.2020.issue-215-en.xml
|z IMF e-Library