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| Walid Benayed and Foued Badr Gabsi |
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| ''Domestic public debt and financial development in Sub-Saharan Africa: Is there an inverted-U relationship?'' |
| ( 2020, Vol. 40 No.1 ) |
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| This paper assesses the nonlinear effect of domestic public debt on financial development using a panel of 20 low-income Sub-Saharan African countries over the period 2000-2010. Based on the framework proposed by Lind and Mehlum (2010), our analysis confirms the existence of an inverted-U relationship between domestic public debt and bank credit to the private sector with a threshold of about 52 % of GDP. The regression results are robust across different specifications and diverse estimation techniques. |
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| Keywords: domestic public debt, financial development, an inverted-U relationship, panel data. |
JEL: H6 - National Budget, Deficit, and Debt: General
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| Manuscript Received : Jul 28 2019 | | Manuscript Accepted : Mar 25 2020 |
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