Review and Appraisal of the Government Monetary and Fiscal Policy Response to the 1983-1984 Balance of Payments Crisis

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The 1983-1984 Balance of Payments Crisis has affected all sectors of the economy and all segments of society as it has manifested itself in the growing unemployment and underemployment problems, in the all-time inflation rates and in the unprecedented contraction of the economy. Many studies have been conducted and published about the underlying causes of the economic crisis, but few have looked into the government’s response to it, as well as into the impact of this response on concerns as growth, employment and inflation. This study evaluates the programs aimed to improve the payments position, manage budget deficits and the growth of reserve money. How have these measures affected inflation, output and national employment? Are these measures consistent with the policies enunciated by the government? These are only few of the concerns that this article hopes to provide clear and unbiased judgments.