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Trade Liberalization and Macroeconomic Performance in Cameroon: An Imperfect Competition Approach

Tchoffo, Rodrigue and Ngouhouo, Ibrahim and Nkemgha, Guivis (2020): Trade Liberalization and Macroeconomic Performance in Cameroon: An Imperfect Competition Approach.

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Abstract

This article analyzes the impact of trade liberalization in a situation of imperfect competition (IC) on the economy of Cameroon as part of the bilateral economic partnership agreement (EPA) with the European Union. As a result, the article shows that taking into account the trade liberalization in a situation of imperfect competition perspective will have amplified impacts on the economy. This result is supported by the implementation of a recursive dynamic computable general equilibrium model based on the 2016 social accounting matrix we built for Cameroon which reveals specifically that: growth losses estimated at 1381.10 billion of CFAF between 2016 and 2040 in perfect competition increase with the consideration of the IC up to 1474.13 billion of CFAF. The losses in customs revenue amount to more than 1008 billion of CFAF against 237.42 billion recorded in perfect competition. Hence, we recommend to the Cameroonian government to resign the agreement.

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