publication . Preprint . 2013

Fiscal Sustainability, Public Investment, and Growth in Natural Resource-Rich, Low-Income Countries; The Case of Cameroon

Issouf Samaké; Priscilla S Muthoora; Bruno Versailles;
Open Access
  • Published: 11 Jun 2013
Abstract
This paper assesses the implications of the use of oil revenue for public investment on growth and fiscal sustainability in Cameroon. We develop a dynamic stochastic general equilibrium model to analyze the effects of such investment on growth and on the path of key fiscal indicators, such as the non-oil primary deficit and public debt. Policy scenarios show that Cameroon’s large infrastructural needs and relatively low current debt levels could justify a temporary deviation from traditional policy advice that suggests saving part of the oil revenue to smooth expenditure over time. Model simulations show that a relatively high degree of efficiency of public inve...
Subjects
free text keywords: Economic models;Economic growth;Cameroon;Production;Public investment;Oil revenues;Fiscal policy;Fiscal sustainability;Low-income developing countries;Natural resources;DSGE, natural resource-rich countries, low-income countries, growth, public debt, government spending, primary deficit, Bayesian Analysis, Forecasting and Simulation, Macroeconomic Analyses of Economic Development, growth.,
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