Currency Devaluation and Resource Mobilization: A Computable General-Equilibrium Analysis of Adjustment in Cameroon.

Currency devaluations prescribed for many developing countries are usually expected to generate a growth-stimulating reallocation of resources in favor of export production. Results from a computable general-equilibrium model of devaluation in Cameroon indicate aggregate growth in export agriculture with decline in some traditional export crops and expansion in specific nontradable food crops. While agriculture and manufacturing expand after devaluation, reduced output from services and construction causes short-term contraction in aggregate output. Positive growth and trade balance effects are dependent on a major reallocation of labor which has been difficult to achieve in Cameroon. Copyright 1998 by Blackwell Publishing Ltd