Can Low-Income Countries Adopt Counter-Cyclical Policies?

Abstract

The current global recession reconfirms low-income countries? vulnerability to external shocks. The exposure is a direct result of integration into the world economy. Declines in export earnings, remittances, tourism and capital flows are some of the transmission mechanisms. The developed and middle-income countries have responded with a series of stimulus packages. More to the point, they are able to adopt counter-cyclical policies. Can low-income economies do the same? (?)Can Low-Income Countries Adopt Counter-Cyclical Policies?