The role of fiscal policy in ameliorating the adverse effects of the global economic downturn is at the center of the policy debate in Latin America, as it is in other parts of the globe. Economic growth in the region is projected to decline from a healthy 4 percent in 2008 into negative territory in 2009, reversing some of the impressive gains in employment and poverty reduction of recent years. Fiscal, or government, revenues are also coming under pressure, making it difficult for countries to achieve targets for budget deficits, even without new spending initiatives. At the same time, many countries are constrained by limited access to financing and still-high levels of public debt, making it difficult to expand public borrowing. In these circumstances, how do policymakers assess whether or not a fiscal stimulus is appropriate? Under what conditions are markets likely to permit this kind of fiscal expansion to be effective in helping support living standards during a period of economic downturn?