The Impact of Domestic and Foreign Public Debt on Economic Growth: Empirical Evidence from Zimbabwe

Talknice Saungweme and Nicholas Odhiambo

Economia Internazionale / International Economics, 2020, vol. 73, issue 1, 77-106

Abstract: This paper applies the autoregressive distributed lag (ARDL) approach to examine the impact of public debt (domestic and foreign) on economic growth in Zimbabwe for the period from 1970 to 2017. The study adds to the ongoing debt-growth debate by testing the impact of the aggregated and disaggregated public debt on economic growth. The empirical results reveal that the impact of public debt on economic growth in Zimbabwe is negative, irrespective of whether public debt is aggregated or disaggregated, and irrespective of the type of debt – domestic or foreign. The study results further reveal that domestic public debt is more disastrous to the Zimbabwean economy than its foreign counterpart. These results are found to apply regardless of whether the regression analysis is performed in the short run or in the long run. La relazione tra debito pubblico interno ed estero e crescita economica: evidenze empiriche dallo Zimbabwe Questo studio utilizza il metodo autoregressivo ad intervalli distributivi (ARDL) per esaminare l’azione esercitata dal debito pubblico (interno ed estero) sulla crescita economica in Zimbabwe nel periodo 2010-2017. La novità di questo articolo rispetto al dibattito in corso è la valutazione dell’impatto del debito pubblico, sia aggregato che disaggregato, sulla crescita economica. I risultati empirici dimostrano che l’impatto del debito pubblico sulla crescita è negativo in Zimbabwe, sia che si tratti di debito aggregato che disaggregato, o di debito interno o estero. I risultati evidenziano altresì che il debito pubblico interno è più dannoso per l’economia dello Zimbabwe della controparte straniera. Questi risultati sono validi anche nel caso di analisi regressiva sia sul breve che sul lungo periodo.

Keywords: Public Debt; Domestic Public Debt; Foreign Public Debt; Economic Growth; Zimbabwe; ARDL (search for similar items in EconPapers)
JEL-codes: H63 O47 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Working Paper: The impact of domestic and foreign public debt on economic growth: Empirical evidence from Zimbabwe (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0864

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