External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis

In the quest for quick economic development, many Sub Saharan African (SSA) countries borrow money to finance their budget deficits and vital infrastructure. Niger has seen its external debt increase year after year without really reaching economic development. This study uses a vector autoregressiv...

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Autor principal:	Oumarou Issoufou
Formato:	article
Lenguaje:	EN
Publicado:	Sciendo 2021
Materias:	economic growth external debt niger variance decomposition (vd) vector autoregression (var) c32 f43 h63 Business HF5001-6182 Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/9e3ce67a25c04532b88da11d13ac3f5c
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spelling	oai:doaj.org-article:9e3ce67a25c04532b88da11d13ac3f5c2021-12-05T14:11:06ZExternal Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis2256-039410.2478/eb-2021-0001https://doaj.org/article/9e3ce67a25c04532b88da11d13ac3f5c2021-01-01T00:00:00Zhttps://doi.org/10.2478/eb-2021-0001https://doaj.org/toc/2256-0394In the quest for quick economic development, many Sub Saharan African (SSA) countries borrow money to finance their budget deficits and vital infrastructure. Niger has seen its external debt increase year after year without really reaching economic development. This study uses a vector autoregressive (VAR) model to investigate the relation linking external debt and economic growth in Niger and variance decomposition forecast to verify if there is any significant impact from shocks for a period of 5 years in the future. The study utilises time series yearly data provided by the World Bank for the period covering 1970–2019. The empirical results reveal no long-run relationship between economic growth, external debt and government spending in Niger. The results also indicated that, on average ceteris paribus, the past realisation of economic growth is related to an increase of 97.75 % in economic growth, while the past realisation of external debt and government spending is associated with an increase of 83.77 % and 79.70 % in external debt and government spending, respectively. The results furthermore show that economic growth has a statistically significant causal effect on government spending in the short term. One percentage increase in economic growth accounts for an increase of 35.28 % in government spending on average ceteris paribus. The variance decomposition forecast reveals that economic growth has a significant influence on predicting government spending in the future.Oumarou IssoufouSciendoarticleeconomic growthexternal debtnigervariance decomposition (vd)vector autoregression (var)c32f43h63BusinessHF5001-6182Economics as a scienceHB71-74ENEconomics and Business, Vol 35, Iss 1, Pp 1-13 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	economic growth external debt niger variance decomposition (vd) vector autoregression (var) c32 f43 h63 Business HF5001-6182 Economics as a science HB71-74
spellingShingle	economic growth external debt niger variance decomposition (vd) vector autoregression (var) c32 f43 h63 Business HF5001-6182 Economics as a science HB71-74 Oumarou Issoufou External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis
description	In the quest for quick economic development, many Sub Saharan African (SSA) countries borrow money to finance their budget deficits and vital infrastructure. Niger has seen its external debt increase year after year without really reaching economic development. This study uses a vector autoregressive (VAR) model to investigate the relation linking external debt and economic growth in Niger and variance decomposition forecast to verify if there is any significant impact from shocks for a period of 5 years in the future. The study utilises time series yearly data provided by the World Bank for the period covering 1970–2019. The empirical results reveal no long-run relationship between economic growth, external debt and government spending in Niger. The results also indicated that, on average ceteris paribus, the past realisation of economic growth is related to an increase of 97.75 % in economic growth, while the past realisation of external debt and government spending is associated with an increase of 83.77 % and 79.70 % in external debt and government spending, respectively. The results furthermore show that economic growth has a statistically significant causal effect on government spending in the short term. One percentage increase in economic growth accounts for an increase of 35.28 % in government spending on average ceteris paribus. The variance decomposition forecast reveals that economic growth has a significant influence on predicting government spending in the future.
format	article
author	Oumarou Issoufou
author_facet	Oumarou Issoufou
author_sort	Oumarou Issoufou
title	External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis
title_short	External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis
title_full	External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis
title_fullStr	External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis
title_full_unstemmed	External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis
title_sort	external debt and economic growth in niger: a vector autoregression and variance decomposition analysis
publisher	Sciendo
publishDate	2021
url	https://doaj.org/article/9e3ce67a25c04532b88da11d13ac3f5c
work_keys_str_mv	AT oumarouissoufou externaldebtandeconomicgrowthinnigeravectorautoregressionandvariancedecompositionanalysis
_version_	1718371375949807616

External Debt and Economic Growth in Niger: a Vector Autoregression and Variance Decomposition Analysis

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