Liquidity Trap in Developing Economy: The Case of CEMAC ()
ABSTRACT
In the
countries in transition, and more specifically those in the Cemac zone, the
economies seem to present symptoms of a liquidity trap in recent years, as
evidenced by sluggish economic growth, high unemployment and low demand. On the
basis of hypotheses derived from a theoretical model, an empirical estimate was
used. The results of the model indicate that this phenomenon exists in the Cemac
area and that monetary policy is ineffective, and therefore its treatment can
only be envisaged through innovative fiscal stabilisation and recovery policies
aimed at boosting the private sector, on the one hand, and promote a
participatory public policy materialized by the implementation of a
decentralization of economic power to actors of civil society, the sector and
local elected officials. Such a reform would aim to improve the effectiveness
of public policies in a context of uncertainty and poverty.
Share and Cite:
Louis, N. (2021) Liquidity Trap in Developing Economy: The Case of CEMAC.
Open Journal of Business and Management,
9, 3036-3052. doi:
10.4236/ojbm.2021.96170.
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