The Benefits of Reading Principles of Economics by Roberto Medina: Download the PDF Book Today
The main constraints which hold back the recovery of the economy are the lack of trust in the government, which is manifesting itself in daily negative public opinion polls; insecurity as peoples essential needs are still not met, in particular with respect to food; the lack of a diversified and sustainable economy based on the public and private sectors in line with social principles and democratic values; and the lingering of corruption and/or neoliberal reforms which continue to undermine efforts to implement policies that reinforce democracy and productivity.
principles of economics pdf download by roberto medina
Medina increased public expenditure as a proportion of GDP to a very high level, and this was the most economically restrictive policy during the period of review. This constraint on the growth of public spending is likely to persist as the political economy enters a period of modernization and the balance between competing concerns shifts towards more conservative and politically-oriented policies. Since the already high level of government expenditure was constantly increasing during the period of review, the impact of fiscal space in the near term is very limited.
The price stability regime is relatively weak in Latin America, but the Medina administration has generally been successful in meeting monetary targets. The state pension system is, however, in a difficult situation. It was not able to avoid severe fiscal consequences and is currently struggling to deal with the impact of rising pension contributions.
The main political pressure is on price stability and fiscal responsibility. Although public debt has risen under Medina, this has not been to an excessive level and this has provided political cover for the government to focus on macroeconomic stability. For that reason, public debt is currently a relatively strong constraint on monetary policy. Again, the high level of public debt is, and has been, a constraint on the growth of public expenditure as a percentage of GDP, but this is now starting to reverse in the near term. The performance of fiscal consolidation has been strong in the context of low inflation. This is due to rapid decreases in non-productive expenditure, which have been more than offset by increases in productive expenditure and higher tax revenues. The biggest gains have been achieved through faster implementation of the Panamanian administrative system. It has been possible to transfer existing personnel from the old system to the new and train them. As a result, the capacity of the state to enforce administrative compliance has been greatly strengthened. Although the main challenge remains the high level of corruption, these measures have been successful in reducing corruption, although corruption levels are currently unsustainable.