 Investigation into the Nexus Between External Debt and Economic Growth in Tanzania, 1980-2023Shalom Gabriel and Michael O.A. Ndanshau MPRA Paper from University Library of Munich, Germany Abstract: The primary objective of this study was to empirically establish the nature of the relationship between external debt and economic growth in Tanzania, both in the short run and long run. The ARDL bounds test and the error correction model (ECM) were applied to annual time-series data for the period from 1980 to 2023. Both ARDL and ECM econometric results revealed a long-run equilibrium relationship among economic growth, external debt, and some covariates relevant to Tanzania. The results revealed a less-than-proportional negative effect of a unit change in external debt on economic growth in the long run, but a significant positive effect in the short run. The finding emphasizes the importance of prudent fiscal policy as a prerequisite for effective debt management to achieve sustainable and inclusive economic growth and development. This study may benefit from a follow-up study on threshold debt, domestic debt, and debt servicing in relation to economic growth in Tanzania. Keywords: External debt; economic growth; ARDL model; Tanzania (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:128876 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.