Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/304145 
Year of Publication: 
2023
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 11 [Issue:] 2 [Article No.:] 2235827 [Year:] 2023 [Pages:] 1-16
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This paper examines the impact of public debt on fiscal balance. This study uses the standard debt equation in a fiscal reaction and impulse response functions framework to assess the trajectory of public debt and its sustainability within the Sub-Sahara region from 1980-2017. From the estimations of the fiscal reaction function, the lagged primary balance significantly affects the fiscal deficits of Sub-Saharan African countries. Also, public debts to the gross domestic product beyond a threshold of fifty percent are positive and significantly associated with the primary balance. Fiscal deficits contribute to increases in the debt stock of about 120% over the ten-year for the Sub-Sahara region. The results imply that fiscal governance is required to constrict fiscal deficits whenever debt stock levels approach a certain threshold and growth. Therefore, stakeholders should implement enhanced fiscal policy rules on fiscal balance, public debts, and economic growth to improve debt sustainability.
Subjects: 
debt sustainability
economic growth
fiscal policy
primary balance
Public debt
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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