The macroeconomic effects of public debt: an empirical analysis of Mozambique

2019/07/22 by António Afonso, Yasfir Ibraimo
Economics, Econometrics and Finance · #Fiscal Policies and Political Economy #Fiscal Policy and Economic Growth #Monetary Policy and Economic Impact

paper · doi:10.1080/00036846.2019.1644445

Abstract

We assess empirically the macroeconomic effects of public debt for the case of Mozambique over the period of 2000Q1-2016Q4. We use a Vector Autoregression model to assess these effects through impulse response functions and variance decomposition. We conclude that debt service variables have more negative economic effects than debt variables. Debt variables over the period of this study had no significant impact on the real output and the debt service component depressed the real output, increased the general price level and accounted for the depreciation on the domestic currency.

Citations

• Macroeconomics and Reality
• Testing for unit roots in autoregressive-moving average models of unknown order

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