External Debt-Driven Unemployment, Exchange Rate Volatility, and Interest Rates: Hysteresis Effect Evidence from the Burundian Economy

Emmanuel Nizigiyimana, Etienne Buregeya and Jean de Dieu Ndikumana
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Emmanuel Nizigiyimana: Ecole Nationale d'Administration (ENA)
Jean de Dieu Ndikumana: École Normale d'Administration

African Journal of Commercial Studies, 2026, vol. 7, issue 4

Abstract: This study examines the determinants of unemployment in Burundi through a Vector Error Correction Model (VECM) incorporating the unemployment rate, exchange rate volatility, lending interest rate, their interaction term, and the stock of external debt over the period 1991–2025. The results reveal that external debt is the dominant structural determinant of long-term unemployment (t = -8.217), with a speed of adjustment significantly lower than that of debt (-0.020

Keywords: Unemployment; External Debt; Exchange Rate Volatility; Interest Rate; Hysteresis Effect; Marginal Effect; Vector Error Correction Model (VECM); Burundian Economy (search for similar items in EconPapers)
JEL-codes: C32 E24 E43 F31 F34 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsl:2026-053

DOI: 10.59413/ajocs/v7.i4.20

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