The long-run effects of fiscal consolidation on economic activity in the CEMAC zone

Vivien Narcisse Wabo Nokam and Syrie Galex Soh
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Vivien Narcisse Wabo Nokam: University of Yaounde II
Syrie Galex Soh: University of Yaoundé II

Review of Economic Analysis, 2025, vol. 17, issue 1, 69-93

Abstract: "This study aims to analyze the long-run effects of fiscal consolidation on economic activity in the Economic and Monetary Community of Central Africa (CEMAC), a grouping of six countries (Cameroon, Congo, Gabon, Equatorial Guinea, the Central African Republic, and Chad) forming a monetary union. The empirical analysis of annual data from the Bank of Central African States (BEAC) over the 1987-2016 period first enabled us to identify 22 episodes of fiscal consolidations in all the CEMAC zone countries during the above-mentioned period. Secondly, by adopting the Fully Modified Ordinary Least Square (FMLOS) and the Dynamic Ordinary Least Square (DOLS) panel methods, our results show that fiscal consolidations have recessionary (Keynesian) effects on the CEMAC zone’s economy. Those effects are mainly due to fiscal consolidations that focus on reducing public expenditure."

Keywords: "Fiscal consolidations; economic activity; cointegrated panels; DOLS; FMOLS; CEMAC" (search for similar items in EconPapers)
JEL-codes: E13 E22 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ren:journl:v:17:y:2025:i:1:p:69-93

DOI: 10.15353/rea.v17i1.5970

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