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

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.