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Budget cuts on investments : a brake on growth of WAEMU

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  • Mamadou Diop

    (Chercheur associé au CREM, UMR CNRS 6211, University of Rennes 1, France)

Abstract

The Millennium World Summit defined the attainment of a 7 to 8% growth rate in 2015 by countries members of the WAEMU as one of the main priority for the authorities of the union. For that matter, governments decided to include fiscal policy in a long term dynamic perspective and to consider large development programs. This article estimates long term effects of fiscal policy on economic growth in the Union with the use of panel data. It also identifies the possible substitution effect between investment in the public and in the private sector. This study shows that there are limitations to the use of the IMF’s methodology for the computation of growth contributions in the analysis of fiscal policy effects on the long term process of wealth generation. It proposes a methodology for estimating panel data using moving averages and taking into account the average duration of the GDP of the area.

Suggested Citation

  • Mamadou Diop, 2015. "Budget cuts on investments : a brake on growth of WAEMU," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201515, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:201515
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    More about this item

    Keywords

    Politique budgétaire – Croissance économique – Coupes budgétaires – Données de Panel – Moyenne mobile;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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