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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Fiscal Adjustment to Currency Devaluation in Selected African Countries: An Empirical Analysis
Author:Yiheyis, Zelealem
Periodical:African Development Review
Geographic term:Subsaharan Africa
Subjects:national budget
exchange rates
Economics and Trade
Abstract:Drawing on the experiences of nine sub-Saharan African countries over a period of two decades (1971-1989), the author examines the fiscal consequences of exchange rate adjustment. He identifies the salient channels through which the exchange rate is expected to influence fiscal variables, describes the behaviour of these indicators in the sample countries, and formulates and estimates an empirical model that links the real exchange rate with real fiscal revenue and expenditure. He finds that currency devaluation, where launched, has, on balance, resulted in real depreciation and that the latter has increased real fiscal revenue, with imperceptible effect on real expenditures. The fiscal deficit is found to exert no statistically significant influence on the behaviour of the real exchange rate. Bibliogr., notes, ref., sum. in English and French.