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Abstract
Bu çalışmada, 1998-2018 döneminde kamu borcunun (Dış-iç borçlar) hem kısa hem de uzun vadede Fas ekonomik büyümesine etkisini ARDL (Otoregresif Dağıtılmış Gecikme Sınır testi) modelinden yararlanarak araştırdık. ARDL yaklaşımı, bir modele dahil edilen değişkenler arasında uzun vadeli bir ilişkinin varlığını test etmeyi amaçlamaktadır. Sonuçlar, dış borcun hem uzun hem de kısa vadede ekonomik büyüme üzerinde olumsuz ve istatistiksel olarak anlamlı bir etkiye sahip olduğunu göstermektedir. Ayrıca, iç borcun kısa vadede ekonomik büyüme üzerinde olumsuz ve istatistiksel olarak önemli bir etkisi vardır. Bununla birlikte, uzun vadede ekonomik büyüme üzerinde olumsuz ve önemsiz bir etkiye sahiptir. Dahası, Granger nedensellik testinden kişi başına GSYİH'den Dış borca doğru giden tek yönlü bir nedensellik olduğu anlaşılabilir. Sonuçlara baktığımızda, hükümetin ekonomik büyümeyi hızlandırmak için kamu borcunu azaltması gerektiğini, başka bir deyişle, Fas hükümetinin borcun azaltılabileceği veya hükümetin ödünç aldığı borcun akıllıca kullanılabileceği yöntemler veya stratejiler aramalı. örneğin, yatırımları teşvik etmek ve canlandırmak için borcu kullanmak, böylece daha hızlı ekonomik büyüme.
Keywords
Abstract
In this study, we investigate the impact of public debt (External-domestic debts) on Moroccan economic growth in both the short and long run during the period time of 1998-2018 drawing on The ARDL (Autoregressive Distributed Lag Bound test) model. The ARDL approach aims to test the existence of a long-run relationship among the variables included in a model. The results show that external debt has a negative and statistically significant effect on economic growth in both the long and short run. In addition, domestic debt has a negative and statistically significant impact on economic growth in the short run. Nonetheless, it has a negative and insignificant influence on economic growth in the long run. Moreover, it can be perceived from the Granger causality test that there is only one unidirectional causality running from GDP per capita to External debt. Based on the findings, we concluded that the government should minimize public debt in order to improve economic growth. To put it another way, the Moroccan government should seek techniques or strategies for reducing debt, or the debt borrowed by the government should be utilized properly, such as using debt to encourage and stimulate investments and therefore accelerate economic growth.
Keywords
- Several studies have been conducted to examine the relationship between public debt and economic growth to determine if the debt has a positive or negative impact on growth. In this context, Panizza and Presbitero (2014) suggest that just because debt has a positive effect on economic growth does not imply that a country is deeply in debt. In other words, each country has a debt ceiling that it cannot surpass; if that debt ceiling is crossed, growth slows. Furthermore, Eberhardt and Presbitero (2015) discovered that public debt hurts economic growth in the long run after studying the link between public debt and economic development using large panel countries.
- There are contradictory outcomes throughout Africa. Moki (2012), for example, discovered that an increase in public debt leads to an increase in GDP and vice versa after researching the relationship between public debt and GDP in 53 African countries. To put it another way, he concluded that public debt had a significant positive impact on economic growth. Similarly, OwusuNantwi and Erickson (2016) contend that public debt benefits economic growth in Ghana, meaning that public debt has a substantial, positive, and significant influence on economic growth both in the long run (based on Johansen cointegration analysis) and in the short-run ( drawing on Granger Causality). Speaking of Nigeria, Egbetunde (2012) affirms that there’s a positive correlation between public debt and economic growth in the long run. However, in east Africa, different results were found, where Babu, Kiprop, Kalio, and Gisore (2014) ended up supporting the idea that the government ought to decrease external debt to have faster economic growth since the external debt harms economic growth. in the same way, Blake (2015), asserts that the Jamaican government must look for methods or strategies whereby debt could be reduced. Because the high level of debt in Jamaica decreases economic growth heavily.
- The same may be said for Asia's emerging and developing economies. In this regard, Pakistan's findings indicate a debt overhang effect problem, i.e., the relation between public debt and GDP is negative and large, both in the short and long run (Akram, 2011). Lee and Ng (2015) obtained a similar finding in Malaysia, stating that public debt has a negative influence on Malaysian economic development and that foreign debt has a negative influence on Malaysian economic growth. As a result, the government of Malaysia should discourage the usage of public debt. Furthermore, overall debt has a negative influence on Bangladesh's growth, showing that the country is dealing with a debt overhang. (2012); (2012) (Akhter & Hassan). Nonetheless, Mohanty and Mishra (2016) contend that India's public debt should not be regarded as a burden and that the government may expand it to achieve greater economic growth. This implies that in India, public debt and economic growth have a significant positive relationship. According to Fincke and Greiner (2015), the relationship between public debt and GDP is significantly favorable in rising nations. According to Fincke and Greiner (2015), the positive connection may be attributed to those countries' high growth rates.
- In terms of Europe, Baum, Checherita-Westphal, and Rother (2013) contend that, while public debt has a positive influence on economic growth in the short run, seeking to decrease debt harms economic growth in the long run. However, when debt levels are high, reducing them has a beneficial influence on economic growth. In this regard, a study done on the European Union by Mencinger, Aristovnik, and Verbic (2014) reveals that a low level of public debt has a positive influence on economic growth, but a high level of debt has a negative influence on economic growth. It's also worth noting that Balassone, Francese, and Pace (2011) revealed similar findings in Italy, specifically, a negative link between public debt and economic growth.
- Concerning Morocco, there are debatable results. For instance, As reported by Nor- Eddine and Chkiriba (In the case of Morocco, the results are debatable. According to NorEddine and Chkiriba (2019), an increase in public debt causes a decline in the Moroccan economic growth rate. External debt, according to Nor-Eddine and Chkiriba (2019), has a detrimental influence on economic growth both in the short and long run. Furthermore, he believes that foreign debt and Moroccan economic growth go in opposite directions (basing on ARDL between 1988-2016). that Moroccan economic growth and foreign debt run in opposing ways (basing on ARDL between 1988-2016). Moroccan public foreign debt, according to Hind Es-Sounboula (2019), has a favorable influence on GDP growth since it does not surpass the critical debt level (basing on the VAR model and causality techniques 1998 to 2017). El Bettioui and Ouia (2018) further confirm that Moroccan government debt has a beneficial influence on GDP growth.
- As a consequence, from 1998 to 2018, we employ the ARDL (Autoregressive Distributed Lag Bound Test) model to determine if public debt (both external and domestic debt) helps Morocco's economic progress (21 years). In this approach, we will be able to confirm or refute the previous study on Morocco. In other words, we will show if the public debt has a positive or negative impact on Moroccan economic growth.
- The main purpose of the study is to examine the relationship between public debt (external and domestic debt) and economic growth in both the long and short run basing on ARDL (Autoregressive Distributed Lag Bound Test) model and that between 1998-2018 in Morocco. It’s worth mentioning that the ARDL bound testing approach is used to test long-run equilibrium relationships among economic growth, external and domestic debt.
- Table 3. Augmented Dickey-Fuller (ADF) Test It can be observed from the table that the lnGDPK is stationary in its level but only in intercept, however, it has unit root in intercept & trend (level). Looking at the lnGDPK’s situation at the first difference we can notice that it’s stationary only in intercept & trend. Concerning the External debt (EXD) it is obvious that it is stationary in its level in both intercept and intercept & trend. For domestic debt (DD) it is stationary in its level (intercept & trend) and at its first difference (intercept & trend). Note: for External and domestic debt we used breakpoint unit root. ARDL TEST The ARDL approach aims to test the existence of a long-run relationship among the variables included in a model. Besides, ARDL is efficient for small samples also short- and long-term coefficients can be estimated at the same time. For that reason, a bounds testing approach has been developed (Pesaran et al., 2001). Thus, UECM (unrestricted error correction model ∆LnGDPKt= β0+
- Our findings can be explained returning to Barro (1974) who deepens Ricardo's thesis by combining the themes of evictions and rational expectations, so according to him, if the government finances an increase in public expenditure by resorting to borrowing, or if it lowers the taxes by leaving the public expenditure and the money supply unchanged, the agents will anticipate the tax increases which will be necessary later to pay the interest on the debt and to repay the principal. As a result, agents know a priori that these two methods of financing are tax recourse; they also know that there will be an increase in public debt and the use of the inflationary tax. The accumulation of long-term inflation and the increase in taxes will ultimately make the state less credible. The agents will then prepare for the future tax purge. They will increase their current savings in anticipation of future tax increases and will not consider themselves richer after the implementation of the stimulus policy. The result will be that this policy followed by the government will have no stimulating effect on the economy (adverse effect on economic growth), regardless of how the deficits are financed.
- So it can be said that our findings agree with Barro’s approach, however, they disagree with the Keynesian model that considers the effect of an increase in public debt on growth is positive (Guisse, 2016) GRANGER CAUSALITY TEST
- FIG 2. Plot of CUSUM and CUSUM of squares test for lnGDPkt model Figure 2 provides a cumulative sum (CUSUM) and the sum of squares (CUSUM sq) for the series model lnGDPkt. The CUSUM and CUSUM sq graphs indicate the stability of the parameters in the model (Pesaran et al., 2001). Therefore, the figure above confirms the stability of the model because as we can see all the coefficient values lie inside the critical limits.
- Domestic debt has a negative and statistically significant impact on economic growth in long run. Consequently, in general, we can say that the impact of public debt has an adverse influence on Moroccan economic growth, it is interesting to highlight that this result is corresponding to Nor-Eddine and Chkiriba (2019) findings where they confirm that an increase in the public debt leads to a decrease in Moroccan economic growth rate. besides, they emphasized that external debt has a negative impact on economic growth in the short run as well as in the long run. Nevertheless, our findings in contrast with Hind Es-Sounboula (2019), who claims that Moroccan public external debt has a positive impact on GDP growth. likewise, our results it is not consistent with El Bettioui and Ouia (2018) who confirm also that Moroccan public external debt has a positive impact on GDP growth.
- Mencinger, J., Aristovnik, A., & Verbic, M. 2014. The impact of growing public debt on
- economic growth in the European Union. Amfiteatru Economic Journal, 16(35), 403- Mohanty, A. R., & Mishra, B. R. 2016. Impact of Public Debt on Economic Growth: Evidence
- from Indian States. Vilakshan: The XIMB Journal of Management, 13(2). Moki, M. 2012. An analysis of the relationship between public debt and economic growth in
- Africa. Unpublished MBA Project, University of Nairobi. Nor-Eddine, O., & Chkiriba, D. 2019. External public debt and economic growth in Morocco:
- assessment and impacts. Global Journal of Management And Business Research. Owusu‐Nantwi, V., & Erickson, C. 2016. Public debt and economic growth in Ghana. African
- Development Review, 28(1), 116-126. Panizza, U., & Presbitero, A. F. 2014. Public debt and economic growth: is there a causal
- effect? Journal of Macroeconomics, 41, 21-41. Pesaran, M. H., Shin, Y., & Smith, R. J. 2001 . Bounds testing approaches to the analysis of
