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An Empirical Analysis of Public Debt and Economic Growth: Tunisia as a Case Study

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  • Nizar Ben Abdallah
  • Lamia Daly
  • Imed Mtir

Abstract

Public debt has resulted in various economic problems in Tunisia since the outbreak of its revolution in 2010. The main objective of study is to examine the impact of public debt on growth in Tunisia during the post-revolution period. This study uses a vector error correction model (VECM) to investigate the impact of public debt on economic growth in Tunisia. The results prove the long-term relationship between all the variables. This study shows the drawbacks of debt and how it hampers economic growth; hence, it has a negative influence on interest rates and investments. This will subsequently lead to an economic recession due to decreasing growth.

Suggested Citation

  • Nizar Ben Abdallah & Lamia Daly & Imed Mtir, 2024. "An Empirical Analysis of Public Debt and Economic Growth: Tunisia as a Case Study," Business and Economic Research, Macrothink Institute, vol. 14(1), pages 23-40, December.
    • Handle: RePEc:mth:ber888:v:14:y:2024:i:1:p:23-40
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    References listed on IDEAS

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    1. Aminu, Umaru & Ahmad Aminu, Hamidu & Salihu, Musa, 2013. "External Debt and Domestic Debt impact on the growth of the Nigerian Economy," MPRA Paper 75122, University Library of Munich, Germany.
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    3. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    4. Nur Hayati Abd Rahman & Shafinar Ismail & Abdul Rahim Ridzuan, 2019. "How does public debt affect economic growth? A systematic review," Cogent Business & Management, Taylor & Francis Journals, vol. 6(1), pages 1701339-170, January.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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