The impact of public debt on economic growth in Côte d'Ivoire: New evidence from linear and non-linear ARDL approaches

Saungwem Talknice (), Glenda Maluleke and Nicholas Odhiambo
Additional contact information
Saungwem Talknice: Department of Economics, University of South Africa, South Africa

Croatian Review of Economic, Business and Social Statistics, 2023, vol. 9, issue 1, 61-77

Abstract: This study examines the symmetric and asymmetric impact of public debt on economic growth in Côte d'Ivoire using time series data from 1972 to 2021. The analyses were performed using both linear and nonlinear autoregressive distributed lag (ARDL) models. The study also utilised the bounds F-test for cointegration, the Brock-Dechert-Scheinkman (BDS) nonlinearity test, and the Wald test for asymmetries. The findings of the bounds F-test provide support for both linear and nonlinear cointegration. The BDS test results indicate that the series are nonlinear, while Wald test results revealed an asymmetric relationship between public debt and economic growth in Côte d'Ivoire in the short run and symmetric relationship in the long run. Estimation results for the symmetric ARDL regression model provide no evidence of a statistically significant impact of public debt on economic growth, regardless of whether the analysis was conducted in the short run or long run. The NARDL findings indicate that, on average, positive changes to public debt lead to economic decline in the long run, while negative changes cause an economic upturn in the short run. The findings also show that GDP growth responds rapidly and strongly to negative changes in public debt. Therefore, the study encourages the government of Côte d'Ivoire to be cautious about public debt rise because it was established that they have a negative impact on economic growth. Negative changes in the public debt can serve to minimise the uncertainties in the business environment, thus promoting private, public, and foreign direct investments.

Keywords: ARDL; Côte d'Ivoire; economic growth; NARDL; public debt (search for similar items in EconPapers)
JEL-codes: C22 H63 O40 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/crebss-2023-0005 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:crebss:v:9:y:2023:i:1:p:61-77:n:1

DOI: 10.2478/crebss-2023-0005

Access Statistics for this article

Croatian Review of Economic, Business and Social Statistics is currently edited by Dragan Bagić, Ksenija Dumičić and Nataša Erjavec

More articles in Croatian Review of Economic, Business and Social Statistics from Sciendo
Bibliographic data for series maintained by Peter Golla ().