Published December 3, 2021
| Version v1
Journal article
Open
Effects of Public Debt on Economic Growth with non-linearity in Sub-Saharan Africa: Case of the Countries of the West African Economic and Monetary Union
Authors/Creators
- 1. Mamadou Aliou Diallo, Postgraduate Student of Management of Science and Engineering University: School of Economics and Management, Taiyuan University of Technology; Taiyuan City, Shanxi Province, China, 030024
- 2. Mainly engaged in sovereign credit rating and government debt risk research University: School of Economics and Management, Taiyuan University of Technology; Taiyuan City, Shanxi Province, China, 030024.
Description
This article examines the impact of public debt on economy growth in the West African Economic Monetary Union (WAEMU) region from 2010 to 2019. It does so using data from a panel of eight WAEMU member countries. Using a Panel Smooth Transition Regression (PSTR) model developed by González et al., we establish a non-linear relationship between the influence of public debt on economic growth and the evolution of the debt relative to GDP (2005). The findings show that changes in debt levels have an effect on economic development in both positive and negative directions. The average threshold for this transition is 60.3 %. Our conclusions are substantiated by elements relating to the business environment and the institutional quality.