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The long-run effects of fiscal consolidation on economic activity in the CEMAC zone

Author

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  • Vivien Narcisse Wabo Nokam

    (University of Yaounde II)

  • Syrie Galex Soh

    (University of Yaoundé II)

Abstract

"This study aims to analyze the long-run effects of fiscal consolidation on economic activity in the Economic and Monetary Community of Central Africa (CEMAC), a grouping of six countries (Cameroon, Congo, Gabon, Equatorial Guinea, the Central African Republic, and Chad) forming a monetary union. The empirical analysis of annual data from the Bank of Central African States (BEAC) over the 1987-2016 period first enabled us to identify 22 episodes of fiscal consolidations in all the CEMAC zone countries during the above-mentioned period. Secondly, by adopting the Fully Modified Ordinary Least Square (FMLOS) and the Dynamic Ordinary Least Square (DOLS) panel methods, our results show that fiscal consolidations have recessionary (Keynesian) effects on the CEMAC zone’s economy. Those effects are mainly due to fiscal consolidations that focus on reducing public expenditure."

Suggested Citation

  • Vivien Narcisse Wabo Nokam & Syrie Galex Soh, 2025. "The long-run effects of fiscal consolidation on economic activity in the CEMAC zone," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 17(1), pages 69-93, March.
    • Handle: RePEc:ren:journl:v:17:y:2025:i:1:p:69-93
    DOI: https://doi.org/10.15353/rea.v17i1.5970
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    Keywords

    Fiscal consolidations; economic activity; cointegrated panels; DOLS; FMOLS; CEMAC;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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