M4 : A computable general equilibrium model for Guadeloupe

In the case of the French overseas departments (DOM), particularly of Guadeloupe, which are at the dawn of the experiment reaching reforms of economic policies, development of a simulation tool such as a macroeconomic CGE appears naturally as a highly desirable requirement. This recourse to the construction of specific models for DOM is perfectly consistent with one of the main conclusions of the information report commissioned by the Senate in the aftermath of the social crisis of early 2009: "Two cross-cutting issues are back ceaselessly into the talks: the failure of administrative tools and a lack of formal evaluation prior to the decision. Therefore, how to build the credibility of public policy that are conducted in the dark? Similarly, how to address the insufficient consideration of the specific characteristics of the overseas departments, which undermines the implementation of the principle of equality before the law which is measured in comparable situations." The aim of this paper is to present the first model of computable general equilibrium (CGE) for Guadeloupe, the M4 model. After a description of the assumptions and specifications included in this model, we discuss its use for the analysis of some variants of economic measures that are at the heart of controversial debates about the modernization of the functioning of the DOM economies.SAM ; General Equilibrium ModellingOur work provides the first results of numerical simulations on the macroeconomic impact of economic measures and devices that are at the heart of controversial debates about the modernization of the economies of Guadeloupe, French Guyana, Martinique and Réunion.