Does External Debt Stocks Have an Asymmetric Effect on Inflation Dynamics in Cameroon? An Application of Nonlinear ARDL
Journal Title: American Journal of Economics and Business Innovation (AJEBI) - Year 2023, Vol 2, Issue 2
Abstract
External debt is indispensable, especially in developing countries which usually face budget deficits to cover up their saving-investment gap. However, the effect of external debt on inflation depends on whether it is increasing or decreasing. Hence, this study aims to examine the effect of external debt stocks on inflation using World Bank data from 1980 to 2020 in Cameroon. The study makes use of non-linear ARDL to examine the positive and negative changes in external debt stocks and their effects on inflation. The results indicate a long-run increasing and decreasing asymmetry effect of external debts on inflation. Only the coefficient of positive external debt stock on inflation is positive and significant in the long run while in the short run, positive and negative external debt stocks respectively have a negative and positive significant impact on inflation. The study recommends that the government should be mindful of increasing external debt as it will become inflationary in the long run.
Authors and Affiliations
Enongene Betrand Ewane Etape Felix Mejame
Keywords
Related Articles
- EP ID EP721185
- DOI https://doi.org/10.54536/ajebi.v2i2.1396
- Views 51
- Downloads 0
Assessment of Internal Audit Tools: A Study of Some Government Health Institutions in Ghana
The growing number of allegations on financial statement fraud, lack of accountability, misappropriation and mismanagement of public resources in public institution has created an increase attention for the need of inter...
A Baseline Assessment of the Total Quality Management Pillars of Commitment to Quality, Customer Satisfaction and Continuous Improvement in a Manufacturing Concern
The study intends to contribute to the field of TQM by exploring the relationship between commitment to quality and continuous improvement and giving emphasis on customer satisfaction on how it acts as a mediator. A surv...
Dynamic and Static Effects of Digital Services Trading on Economic Growth of World Regions
The study examines the effect of digital services trading on the economic growth of panel data from five (5) world regions, namely, Africa, Asia, Latin America, Europe, and the Organization for Economic Cooperation and D...
The Mediating Effect of Financial Self-Efficacy on Financial Behavior and Financial Well-Being of College Students in Region XI
A significant proportion of financial stress on students is often related to challenges like covering tuition fees, purchasing textbooks, and managing day-to-day expenses. This measures their ability to navigate financia...
The Fleeting Possibility of Merging the World’s Largest Chip Manufacturer in 2017: The Pain of Chinese Chip Industry
This article examines a possible Chinese semiconductor industry’s merger and acquisition in 2017, the year before the Sino-US trade war and US high-tech sanctions against China. The feasibility of a merger between Tsingh...