The fundamental aim of this paper is to inspect the way macroeconomic factors such as GDP, Inflation, and government spending affect the national debt of Djibouti. What is more, the paper analyzes the fluctuation of the Djiboutian debt over 20 years. Consequently, the paper employed an autoregressive distributed lag model to evaluate the long-run cointegration between the national debt and the potential variables. The paper mainly focuses on Djibouti from the period 2000 to 2020. After applying the model, the data revealed that in the long run if the GDP and the government spending rise by 1% the national debt simultaneously increase. However, that was not the case for inflation since it had the opposite effect. According to the model, an increase of 1% in inflation cause the national debt to go down. The paper summarizes that all the macroeconomics investigated in this study have a significant and noteworthy impact on the national debt of Djibouti. To start with, growth in the domestic product makes it easier to pay the amount of the debt. Additionally, Djibouti is a country that is heavily relied on external debt. Thus, whenever the government is spending or injecting cash into the public sector it always borrows to meet its obligation. Finally, the Djiboutian currency is tied with the dollar as a result the inflation is quite unremarkable and insignificant.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 10, Issue 5) |
| DOI | 10.11648/j.ijefm.20221005.13 |
| Page(s) | 250-257 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2022. Published by Science Publishing Group |
National Debt, Government Spending, GDP, Inflation Rate
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APA Style
Sadik Aden Dirir. (2022). Macroeconomic Determinants of the National Debt in Djibouti: An ARDL Approach. International Journal of Economics, Finance and Management Sciences, 10(5), 250-257. https://doi.org/10.11648/j.ijefm.20221005.13
ACS Style
Sadik Aden Dirir. Macroeconomic Determinants of the National Debt in Djibouti: An ARDL Approach. Int. J. Econ. Finance Manag. Sci. 2022, 10(5), 250-257. doi: 10.11648/j.ijefm.20221005.13
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Download@article{10.11648/j.ijefm.20221005.13,
author = {Sadik Aden Dirir},
title = {Macroeconomic Determinants of the National Debt in Djibouti: An ARDL Approach},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {10},
number = {5},
pages = {250-257},
doi = {10.11648/j.ijefm.20221005.13},
url = {https://doi.org/10.11648/j.ijefm.20221005.13},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20221005.13},
abstract = {The fundamental aim of this paper is to inspect the way macroeconomic factors such as GDP, Inflation, and government spending affect the national debt of Djibouti. What is more, the paper analyzes the fluctuation of the Djiboutian debt over 20 years. Consequently, the paper employed an autoregressive distributed lag model to evaluate the long-run cointegration between the national debt and the potential variables. The paper mainly focuses on Djibouti from the period 2000 to 2020. After applying the model, the data revealed that in the long run if the GDP and the government spending rise by 1% the national debt simultaneously increase. However, that was not the case for inflation since it had the opposite effect. According to the model, an increase of 1% in inflation cause the national debt to go down. The paper summarizes that all the macroeconomics investigated in this study have a significant and noteworthy impact on the national debt of Djibouti. To start with, growth in the domestic product makes it easier to pay the amount of the debt. Additionally, Djibouti is a country that is heavily relied on external debt. Thus, whenever the government is spending or injecting cash into the public sector it always borrows to meet its obligation. Finally, the Djiboutian currency is tied with the dollar as a result the inflation is quite unremarkable and insignificant.},
year = {2022}
}
TY - JOUR T1 - Macroeconomic Determinants of the National Debt in Djibouti: An ARDL Approach AU - Sadik Aden Dirir Y1 - 2022/09/21 PY - 2022 N1 - https://doi.org/10.11648/j.ijefm.20221005.13 DO - 10.11648/j.ijefm.20221005.13 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 250 EP - 257 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20221005.13 AB - The fundamental aim of this paper is to inspect the way macroeconomic factors such as GDP, Inflation, and government spending affect the national debt of Djibouti. What is more, the paper analyzes the fluctuation of the Djiboutian debt over 20 years. Consequently, the paper employed an autoregressive distributed lag model to evaluate the long-run cointegration between the national debt and the potential variables. The paper mainly focuses on Djibouti from the period 2000 to 2020. After applying the model, the data revealed that in the long run if the GDP and the government spending rise by 1% the national debt simultaneously increase. However, that was not the case for inflation since it had the opposite effect. According to the model, an increase of 1% in inflation cause the national debt to go down. The paper summarizes that all the macroeconomics investigated in this study have a significant and noteworthy impact on the national debt of Djibouti. To start with, growth in the domestic product makes it easier to pay the amount of the debt. Additionally, Djibouti is a country that is heavily relied on external debt. Thus, whenever the government is spending or injecting cash into the public sector it always borrows to meet its obligation. Finally, the Djiboutian currency is tied with the dollar as a result the inflation is quite unremarkable and insignificant. VL - 10 IS - 5 ER -
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