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Pro cyclicité de la politique budgétaire et surveillance multilatérale dans les unions monétaires africaines

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  • Sampawende Jules TAPSOBA

    (Centre d'Etudes et de Recherches sur le Développement International)

  • Sylviane GUILLAUMONT JEANNENEY

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

Abstract

The devaluation of the CFA Francs in 1994 has highlighted the relevance of fiscal coordination in African monetary unions. After 1994, African monetary unions have adopted a fiscal rule which prescribes a permanent nil or positive budgetary balance. This article studies how this fiscal rule affects the cyclicality of fiscal policies. The results show that compared to other African states, such a fiscal rule creates a pro cyclical bias in public expenditure during recessions. The bias justifies a modification of the rule in order to impose a fiscal surplus during expansions.

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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 200904.

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Length: 47
Date of creation: 2009
Date of revision:
Handle: RePEc:cdi:wpaper:1038

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Keywords: Fiscal policies; Pro cyclicality; currency union; Fiscal rules; Africa.;

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  12. Vito Tanzi, 1978. "Inflation, Real Tax Revenue, and the Case for Inflationary Finance: Theory with an Application to Argentina (Inflation, recettes fiscales réelles et avantages du financement inflationniste: théo," IMF Staff Papers, Palgrave Macmillan, Palgrave Macmillan, vol. 25(3), pages 417-451, September.
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  14. Oral Williams & Olumuyiwa Adedeji, 2007. "Fiscal Reaction Functions in the CFA Zone," IMF Working Papers, International Monetary Fund 07/232, International Monetary Fund.
  15. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
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