Régimes de change et soutenabilité des finances publiques dans les pays en développement

Blaise Gnimassoun and Isabelle Lokonon do Santos

Revue économique, 2022, vol. 73, issue 3, 389-427

Abstract: This paper studies the sustainability of public finances in developing countries and examines whether this depends on the choice of their exchange rate policy. To this end, we use an econometric approach based on panel cointegration and a sample of 110 countries over the period 1998-2017. Our results show that the public finances of these countries are sustainable. However, the level of sustainability is low in the absence of the automatic stabilizer. The choice of the exchange rate regime does not influence the level of sustainability of public finances. This result is partly explained by the asymmetric effect of the exchange rate regime on fiscal performance. While fixed exchange rate regimes are associated with better overall fiscal performance, flexible exchange rate regimes are more effective in reducing fiscal deficits.

Keywords: fiscal policy; sustainability of public finances; exchange rate regimes (search for similar items in EconPapers)
Date: 2022
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