Study of the impact of Public Debt on Moroccan Economic Growth: ARDL model

Abstract

There are a number of theoretical arguments that lead to the conclusion that an increase in the public debt ratio could lead to a reduction in growth due to a crowding-out effect of productive investment and the relative inefficiency of the State in the use of its resources. However, no argument is really convincing because, as usual in economics, theory does not provide a definitive answer.

The objective of this article is to study the impact of Morocco's total government debt on economic growth. We will estimate an ARDL model (Auto Regressive Distributed Lag model), which is part of the class of dynamic models, and which makes possible to capture the temporal effects (adjustment time, anticipations, etc.) in the explanation of a variable.

JEL classification: H10, H60, O40

Paper Type: Empirical Research