Sustainability of Public Debt and Economic Growth in Cote d’Ivoire:is There a Threshold Effect?

• 作者: Koffi Pokou
• 来源期刊: 经济科学研究(英文)
• 学科: 经济
• 关键词: Public debt and growth sustainability Threshold Autoregressive(TAR) Granger causality Threshold effects
• 年，卷（期）: 2020,（3）
• 页码范围: 1-12
• 页数: 12页
• 分类号: F12

摘要

The development of Ivorian public debt in recent years has raised concerns.Is its current level capable of boosting the economy or,on the contrary,being at the source of a recession?This paper analyzes the effect of the level of indebtedness on economic growth in Côte d’Ivoire using the Threshold Autoregressive(TAR)model over the period 1970-2018.The results obtained in the short run shed light on the no relationship between public debt and economic growth.In the long run,on the other hand,there is a bi-directional granger causality between public debt and the sustainability of economic growth.The non-linearity between the variables of interest has been studied and the results show the presence of a threshold effect:beyond 48.03 percent of GDP,any increase in public debt by 1%should reduce economic growth by 0.28%.Thus,the study questions the relevance of the criterion set by the WAEMU:public debt<70%of GDP.