Economic Reforms and Monetary Poverty in French Overseas Departments: Teaching from a Microsimulated CGE

Résumé 0

French overseas regions benefit from an arsenal of tax and budgetary instruments designed to promote their economic development, among them, the octroi de mer and wage premiums for public servants. We intend to assess the impact of the suppression of these two instruments using a model composed of a computable general equilibrium module combined with a microsimulation module. This model applied to Guadeloupe and called CloDyn integrates several specificities of French overseas economies. It incorporates retroactive effects of agents behaviour and takes into account the heterogeneity of households. We show that both reforms can have negative macroeconomic impacts. But according to the effect that will prevail between the price effect and the income effect, the policy can be beneficial or not for modest households.Classification JEL : D58, I32, E62, E64, O54.