Interactions between Monetary and Budgetary Policies in the CEMAC Zone

The aim of this article is to analyse the impact of fiscal policy on the general price level in the CEMAC zone in a context of increasing of growing debt and budget deficits. In particular, it aims to study the effects of public deficit and debt on inflation. In using data from the 06 CEMAC countries covering the period 1990-2020, we have highlighted the budgetary theory of price levels. The results of the econometric estimates obtained using the Feasible Generalized methods show that the budget deficit and public (and external) debt (and external) debt have positive and significant effects on inflation. Furthermore, the results show that external public debt is more inflationary than inflationary than domestic public debt in this Zone.