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The objective of this paper is to examine the relationship between fiscal and monetary policy coordination and fiscal multipliers in Argentina, Brazil, Chile, and Mexico. To do so, we first look at the theoretical framework of the New Consensus Macroeconomics (NCM), and then analyze the trends in the four countries for variables including consumption, investment, government spending, and interest rates. Finally, we present an estimate of the spending and monetary multipliers with proxy variables. The contribution of this paper consists of one, showing the inexistence of the crowding out effect, and two, quantifying the multipliers for the aforementioned countries. [ABSTRACT FROM AUTHOR]

Between 2011 and 2014, the Brazilian government granted generous fuel subsidies via Petrobras. This paper adopts a macroeconomic model to estimate the changes that would take place in the consumption and production of fuels and other goods present in the Brazilian economy if the fuel subsidy were removed. The results suggest that the reduction of fuel subsidies, if offset by a reduction in taxation on consumption, capital, or labor, would reduce fuel consumption and increase the consumption and production of other goods. If the withdrawal of the subsidy were offset by a reduction on fuel tax, the consumption of all goods would increase, thereby proving this measure to be the most beneficial course of action. [ABSTRACT FROM AUTHOR]