Non-Linear Impact of Public Debt on Inflation in Rwanda

IF 7.6 1区 经济学 Q1 ECONOMICS Review of Economics and Statistics Pub Date : 2023-08-01 DOI:10.1515/roe-2023-0049
Talknice Saungweme, Glenda Maluleke, N. Odhiambo
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Abstract

Abstract This paper examines Rwanda’s debt-inflation dynamics and the asymmetric effect of government debt on inflation using time series data spanning the years 1980–2021. The study applied a battery of tests to examine the debt-inflation linkage in this country, including the bounds F-test for cointegration, the Brock-Dechert-Scheinkman (BDS) nonlinearity test, the Wald test for asymmetries and the nonlinear autoregressive distributed lag (NARDL) model for short run and long run asymmetric impact. The results of the NARDL bounds F-test for cointegration support a long-run nonlinear link between public debt and inflation in Rwanda. The findings of the BDS test reveal that the series is nonlinear in all dimensions, whereas the results of the Wald test show that public debt has an asymmetric impact on inflation, regardless of the timescale considered. The NARDL findings show that while a rise in public debt tends to be inflationary in the short run, a decline in public debt typically leads to a decrease in inflation in the long run. The study also demonstrates that inflation responds more rapidly and strongly to positive than negative shocks in public debt. The country should think about continuous enforcement of fiscal consolidation measures and reforms, as well as implementing economic growth-friendly policies to reduce debt increases in the short run. This will induce a decline in inflation and enhance macroeconomic stability in the long run.
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卢旺达公共债务对通货膨胀的非线性影响
本文利用1980-2021年的时间序列数据考察了卢旺达的债务-通胀动态以及政府债务对通胀的不对称影响。本研究采用了一系列检验来检验我国债务与通货膨胀的联系,包括协整的边界f检验、Brock-Dechert-Scheinkman (BDS)非线性检验、不对称的Wald检验和短期和长期不对称影响的非线性自回归分布滞后(NARDL)模型。协整的NARDL边界f检验的结果支持卢旺达公共债务和通货膨胀之间的长期非线性联系。BDS检验的结果表明,该序列在所有维度上都是非线性的,而Wald检验的结果表明,无论考虑何种时间尺度,公共债务对通胀的影响都是不对称的。NARDL的研究结果表明,虽然公共债务的增加在短期内往往会导致通货膨胀,但从长期来看,公共债务的下降通常会导致通货膨胀的下降。该研究还表明,通胀对公共债务的正面冲击的反应比负面冲击更快、更强烈。该国应考虑继续实施财政整顿措施和改革,同时实施有利于经济增长的政策,以在短期内减少债务增长。这将导致通货膨胀下降,并从长远来看增强宏观经济的稳定性。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
8.50
自引率
0.00%
发文量
175
期刊介绍: The Review of Economics and Statistics is a 100-year-old general journal of applied (especially quantitative) economics. Edited at the Harvard Kennedy School, the Review has published some of the most important articles in empirical economics.
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