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The Hypothesis of Fiscal Devaluation in Developing Countries: The Case of Gabon

M¨¦dard MENGUE Bidzo

Applied Economics and Finance, 2019, vol. 6, issue 5, 70-82

Abstract: In the absence of adjustment by exchange rates, it is suggested that the effects of a devaluation of the exchange rate through taxation be produced. The purpose of our study is thus to examine the plausibility of such an option in developing countries participating in a monetary union. From a normative perspective, we proceed to an empirical highlighting of the mechanism of classic fiscal devaluation, thanks to the estimation of a model with threshold effects on the data of the Gabonese economy. As a result, the option of fiscal devaluation is conceivable for Gabon. But, its effects would be small.

Keywords: Fiscal devaluation; competitiveness; social contributions; Gabonese economy; threshold effect model; value added tax (search for similar items in EconPapers)
JEL-codes: E62 F13 H23 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:rfa:aefjnl:v:6:y:2019:i:5:p:70-82