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Debt sustainability, structural breaks and nonlinear fiscal adjustment: empirical evidence from Algeria

Author

Listed:
  • Abderrahim Chibi

    (Maghnia University Center)

  • Sidi Mohamed Chekouri

    (Maghnia University Center)

  • Mohamed Benbouziane

    (Tlemcen University)

Abstract

This research work seeks to examine a specific issue of the Algerian public debt sustainability using a nonlinear model approach. The results obviously indicate that the existence of threshold effects in the Algerian public debt depends on the sixth lag in oil price (US $ 80.85 per barrel). Thus, nonlinear unit root tests accept the null hypothesis of the unit roots; this intends to convey that the time series of public debt is not stationary and therefore cannot sustain the public debt in Algeria over the long term.

Suggested Citation

  • Abderrahim Chibi & Sidi Mohamed Chekouri & Mohamed Benbouziane, 2019. "Debt sustainability, structural breaks and nonlinear fiscal adjustment: empirical evidence from Algeria," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(4), pages 369-397, December.
    • Handle: RePEc:spr:inrvec:v:66:y:2019:i:4:d:10.1007_s12232-019-00327-8
    DOI: 10.1007/s12232-019-00327-8
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    More about this item

    Keywords

    Public debt; Sustainability; Threshold effects; STAR models; Stationarity;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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