Public debt and Economic growth in DRC

Dette publique et Croissance économique en RDC

Joël Kazadi ()
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Joël Kazadi: Université de Kinshasa, International University of Applied Sciences

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Abstract: This paper aims to determine the optimal public debt threshold in DRC. To do this, we use the regime-switching models introduced by Chan and Tong (1986). We then apply this methodology to data for the DRC economy over the period 1993-2022, while controlling for other determinants of growth. The results show that, ceteris paribus, external public debt would reduce growth when the public debt ratio is above 19.65%. In terms of prospects, these results provide evidence for a careful debt policy capable of appropriately financing economic activity to sustain long-run growth.

Keywords: Economic growth; Regime switching models; DRC; Public debt; Dette publique; Croissance économique; Modèles à changement de régime; RDC (search for similar items in EconPapers)
Date: 2023-08-05
Note: View the original document on HAL open archive server: https://hal.science/hal-04181577
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