Direct and Indirect Effects of External Public Debt on Tunisian's Sustainable Economic Development

Abstract

This chapter examines the influence of external public borrowing resources on economic progress in Tunisia. The study focuses on two stages: First, the influence is studied in a direct sense and then in an indirect sense, i.e., through a transmission channel of this influence. By applying the autoregressive distributed technique with staggered lags (ARDL), over a period ranging from 1986 to 2019, the results showed that the influence of external borrowing resources on growth seems to be unfavorable in the short term but positive in the long term, hence the importance of the empirical technique chosen. Second, three interaction variables were tested, namely total government expenditure, government investment expenditure, and the real effective exchange rate. The results obtained call for better attention to the channels identified to maximize the positive influence of external public debt on the country's economic progress.

Citation

Sabrine, C. (2024), "Direct and Indirect Effects of External Public Debt on Tunisian's Sustainable Economic Development", Hunjra, A.I. and Hussainey, K. (Ed.) The Emerald Handbook of Ethical Finance and Corporate Social Responsibility, Emerald Publishing Limited, Leeds, pp. 69-93. https://doi.org/10.1108/978-1-80455-406-720241004