Tie among Domestic Investment, Total Consumption and External Debt: Lessons from Tunisia

Sayef Bakari and Sofien Tiba

MPRA Paper from University Library of Munich, Germany

Abstract: This paper aimed at examining the tie between domestic investment, total consumption, and external debt in the case of Tunisia over the period 1970-2017. By applying the VECM, in the long-run, our findings recorded the fact that that external debt and domestic investment have a negative effect on total consumption. However, we found a significant negative impact of the total consumption and external debt on domestic investment. In the short run, we recorded that only total consumption and external debt cause domestic investment. Due to the importance of our insights, several lessons for Tunisia in terms of commitment towards the aims of the 14 January revolution and reforms should be undertaken.

Keywords: Domestic investment; Total consumption; External debt; VECM; Tunisia. (search for similar items in EconPapers)
JEL-codes: E21 E22 F34 O55 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-ara, nep-his and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96616

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