Economics
Puerto Rico’s Fiscal Plan Was Doomed Even Before Maria, Stiglitz Says
- Paper suggests fiscal roadmap is ‘unjustifiably optimistic’
- The study comes as island is reviewing the fiscal assumptions
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Puerto Rico’s fiscal turnaround plan may have been doomed from the start, even before Hurricane Maria barreled across the island, according to a study by a group of economists including Nobel Prize winner Joseph Stiglitz.
The roadmap, which island officials are revising in light of the storm, underestimated the degree to which austerity would slow economic growth, wrote Pablo Gluzmann, Martin Guzman and Stiglitz. Some assumptions were "unjustifiably optimistic," while others were "inconsistent with sound macroeconomic theory," according to the paper, whose analyses were done before the Sept. 20 hurricane.