Theoretical and Applied Economics
No. 4 / 2021 (629), Winter
Non-linear effect of public debt on economic growth: The case of Tunisia
University of Tunis, Tunisia
Ghazi BOULILA
University of Tunis, Tunisia
Abstract. This study examines the non-linear effect of public debt on economic growth in Tunisia, making use of the autoregressive distributed lag (ARDL) approach and annual time series data covering the period 1986 to 2019. The results show that public debt has a double impact on economic growth in the long run, which confirms the existence of a non-linear relationship between the two variables in the long run. Thus, they indicate that public debt stimulates growth before contradicting it when it exceeds a certain critical threshold. Indeed, the estimated optimal public debt threshold is 64.4% of GDP. Although the impact of public debt on short-term economic growth is statistically insignificant, this implies that the debt-growth relationship in the short term does not follow a non-linear pattern.
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