By Christopher D. Gerrard, Greg D. Posehn, Granville Ansong
Read or Download Agricultural pricing policy in Eastern Africa: a macroeconomic simulation for Kenya, Malawi, Tanzania, and Zambia, Part 76 PDF
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Additional info for Agricultural pricing policy in Eastern Africa: a macroeconomic simulation for Kenya, Malawi, Tanzania, and Zambia, Part 76
The four countries in this study are concerned about a number of other food and agricultural policies such as access to agricultural land; the relative sizes of the large and small farm sectors in their economies; bringing subsistence producers into the market economy; improving the nutritional status of low-income and vulnerable groups such as pregnant and lactating women and preschool children; and responding positively to the occasional threats of famine. But these latter policies pale in comparison with the previously mentioned policies in terms of the overall impact on the agricultural sector.
To accommodate) whatever demand for money resulted from these low interest rates rather than raise interest rates in order to borrow from the non-bank private sector to finance the deficit. The low interest rates, themselves, discouraged the development of financial markets. Monetizing the deficit was, of course, inflationary. In a situation Page 20 where the government lacked the administrative means to collect taxes at the same rate that it was increasing expenditures, this inflation tax was an effective means of financing development -- up to a point.
Fiscal and monetary policy are interdependent, even in developed countries, but particularly in less developed countries. For example, a government deficit (revenues less than expenditures) must be financed either by borrowing from the non-bank private sector, borrowing from abroad, or borrowing from the Central Bank (otherwise known as printing money). But, among the two internal sources of funds, less developed countries with less developed financial markets have less capacity for financing the deficit by borrowing from the non-bank private sector.
Agricultural pricing policy in Eastern Africa: a macroeconomic simulation for Kenya, Malawi, Tanzania, and Zambia, Part 76 by Christopher D. Gerrard, Greg D. Posehn, Granville Ansong