Theoretical and Applied Economics
No. 4 / 2021 (629), Winter
Budget policy, economic cycle and debt in the West African Economic and Monetary Union (WAEMU) countries: Empirical evidence based on a regime change model
University of Abomey-Calavi, Benin
Abstract. In this paper, we study the non-linear effect of the economic cycle and debt on the basic budget balance (BBB) in WAEMU countries over the period 1982-2018. Using a panel model with threshold effects and smooth transition, the hypothesis of non-linearity between the BBB, the economic cycle and debt was verified. The results show that an increase in the debt ratio above a threshold of 66% has a negative effect on the BBB's elasticity relative to the economic cycle in the following period. Moreover, the results show that the dynamics of the BBB adjust the increase in external debt during high economic growth periods. This measure could be strengthen the reach of the stability and growth pact through its BBB as the economic integration lever initiated by WAEMU countries since several decades.
Contents
The pandemic crisis – A new factor to slow down the expansion of the Eurozone
Revealing the effects of competitiveness and innovation on economic growth: Evidence from European leading and following countries
Public service delivery dilemma and economic growth challenges in the MENA Region
Hidden Markov Model using transaction patterns for ATM card fraud detection
Productivity growth in Chinese cities: The agglomeration effect for cross-regional industrial structures
Time-varying volatility spillover of foreign exchange rate in three Asian markets: Based on DCC-GARCH approach
Non-linear effect of public debt on economic growth: The case of Tunisia
Application of single Sharpe index on the optimal portfolio construction using Indian blue-chip stocks
Budget policy, economic cycle and debt in the West African Economic and Monetary Union (WAEMU) countries: Empirical evidence based on a regime change model
The impact of government spending on the economic growth of a sample of developing countries using panel data
The evolution of consumer prices – the main brake on economic growth
Analysis of income inequalities in the pre-pandemic COVID-19 period