The effectiveness of fiscal policy in DR Congo: Spending and taxing for macroeconomic impact

IF 3.5 2区经济学 Q1 ECONOMICS

Journal of Policy Modeling Pub Date : 2025-03-01 DOI:10.1016/j.jpolmod.2025.01.002

M'pya Banza M , Mumbere Lubula E , Kamala Kaghoma C

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Abstract

This paper investigates the effectiveness of fiscal policy in the Democratic Republic of Congo (DRC), focusing on its impact on GDP, aggregate demand, private consumption, and investment. Employing a medium-scale dynamic stochastic general equilibrium (DSGE) model with Bayesian estimation, the study accounts for the distinct dynamics of Ricardian and non-Ricardian households within the DRC’s socio-economic context. The results indicate that public investment expenditures significantly enhance GDP and household consumption, while current expenditures often fail to stimulate aggregate demand due to corruption and inefficiencies. Conversely, tax reductions are shown to positively influence macroeconomic variables, underlining their importance in fiscal policy design. The findings highlight the critical role of well-targeted fiscal strategies in promoting economic stability and growth in developing economies. Policy recommendations emphasize prioritizing public investment, implementing tax reforms during economic downturns, and addressing systemic corruption to maximize fiscal policy’s macroeconomic impact.

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刚果民主共和国财政政策的有效性：支出和税收对宏观经济的影响

本文研究了刚果民主共和国（DRC）财政政策的有效性，重点关注其对GDP、总需求、私人消费和投资的影响。采用具有贝叶斯估计的中尺度动态随机一般均衡（DSGE）模型，该研究解释了刚果民主共和国社会经济背景下李嘉图和非李嘉图家庭的独特动态。结果表明，公共投资支出显著提高了GDP和家庭消费，而经常支出往往由于腐败和效率低下而无法刺激总需求。相反，减税被证明对宏观经济变量有积极影响，强调了它们在财政政策设计中的重要性。研究结果强调了目标明确的财政战略在促进发展中经济体的经济稳定和增长方面的关键作用。政策建议强调优先考虑公共投资，在经济衰退期间实施税收改革，以及解决系统性腐败问题，以最大限度地发挥财政政策的宏观经济影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Policy Modeling ECONOMICS-

CiteScore

6.20

自引率

11.40%

发文量

期刊介绍： The Journal of Policy Modeling is published by Elsevier for the Society for Policy Modeling to provide a forum for analysis and debate concerning international policy issues. The journal addresses questions of critical import to the world community as a whole, and it focuses upon the economic, social, and political interdependencies between national and regional systems. This implies concern with international policies for the promotion of a better life for all human beings and, therefore, concentrates on improved methodological underpinnings for dealing with these problems.