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Oil depletion and development in Cameroon: A critical appraisal of the permanent income hypothesis

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  • Djiofack, Calvin Z.
  • Omgba, Luc Désiré

Abstract

This paper focuses on medium term policy options in the economic context of natural resource depletion. In particular, a novel approach for analyzing the impact of the permanent income hypothesis (PIH) with a dynamic recursive computable general equilibrium (CGE) model is employed. The model is benchmarked in an oil producing country with declining production, namely Cameroon. The results show that the PIH renders public finances less vulnerable during the post-oil transition. However, adopting the PIH is not associated with substantial improvements in growth and household welfare in Cameroon. Therefore, the PIH cannot be the only basis for better management of oil revenues in the country.

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  • Djiofack, Calvin Z. & Omgba, Luc Désiré, 2011. "Oil depletion and development in Cameroon: A critical appraisal of the permanent income hypothesis," Energy Policy, Elsevier, vol. 39(11), pages 7202-7216.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:11:p:7202-7216
    DOI: 10.1016/j.enpol.2011.08.041
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    Cited by:

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    2. Dzyuba, Yu. & Bakalova, I., 2023. "CGE models for resource-based economy: A comprehensive bibliometric analysis," Journal of the New Economic Association, New Economic Association, vol. 61(4), pages 12-50.
    3. Traore, Fousseini & Zebaze, Calvin Djiofack, 2014. "Managing depleting gold revenues in Mali: An assessment of policy options," Conference papers 332467, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Li, Na & Zhang, Xiaoling & Shi, Minjun & Zhou, Shenglv, 2017. "The prospects of China’s long-term economic development and CO2 emissions under fossil fuel supply constraints," Resources, Conservation & Recycling, Elsevier, vol. 121(C), pages 11-22.
    5. Barkhordar, Zahra A. & Saboohi, Yadollah, 2013. "Assessing alternative options for allocating oil revenue in Iran," Energy Policy, Elsevier, vol. 63(C), pages 1207-1216.

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    Keywords

    Oil; Fiscal policy; CGE;
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