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 Cameroonas 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 investment is needed for scaled-up public investment to make a significant contribution to growth, while maintaining fiscal sustainability.These studies converge on concluding that the early use of natural resource- related revenue to increase public ... We do this using a dynamic stochastic general equilibrium (DSGE) model featuring a public investment-growth nexus andanbsp;...
|Title||:||Fiscal Sustainability, Public Investment, and Growth in Natural Resource-Rich, Low-Income Countries|
|Author||:||Issouf Samaké, Miss Priscilla S. Muthoora, Mr. Bruno Versailles|
|Publisher||:||International Monetary Fund - 2013-06-11|