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

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  • M¨¦dard MENGUE BIDZO

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.

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  • M¨¦dard MENGUE BIDZO, 2019. "The Hypothesis of Fiscal Devaluation in Developing Countries: The Case of Gabon," Applied Economics and Finance, Redfame publishing, vol. 6(5), pages 70-82, September.
    • Handle: RePEc:rfa:aefjnl:v:6:y:2019:i:5:p:70-82
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal devaluation; competitiveness; social contributions; Gabonese economy; threshold effect model; value added tax;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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