External Financial Flows and Economic Growth in Sub-Saharan Africa: The Role of Institutions, Submitted to Journal of Policy Modeling
The objective of this article is to determine the impact of external financial flows, including migrant remittances, official development assistance and foreign direct investment on economic growth in sub-Saharan African countries. Beyond this objective, there are questions about the role of institutions and financial flows in promoting economic growth. We thus examine the importance of institutions but also of financial flows and their interaction on economic growth. From a sample of 30 countries, we try to answer the question of the role of institutions in improving economic growth through external financing.
Keywords: Economic Growth, Financial Flows, Quality of Institutions, Africa
JEL Classification: G00, N17, O47
Trade Integration and the Union Bargaining Power, Submitted to Japanese Economic Review
Brexit, Save our job, Amercia first, No to the FCFA, the abandonment of the transatlantic free trade agreement are all slogans used by unions to challenge trade integration. Yet, in a wage bargaining game, we show that unions only fear integration when they do not have sufficient bargaining power.
Keywords: Monopoly Union, Collective Bargaining, Nash Product, Union Rent
JEL Classification: J5, J51, J52, F13, F15, F16
Testing explosive behavior of public debt in sub-Saharan African countries, Submitted to Journal of Policy Modeling
In this study, we show that the public debt of sub-Saharan African countries experienced explosive periods over between 1975 and 2017. Overall, one in five countries has not experienced a period of public debt explosion. The structure of the economy and in particular external dependence are largely responsible for the explosive nature of public debt. However, membership of an economic grouping does not protect against explosive debt behavior, and therefore compliance with the convergence criteria does not imply that a country will not experience an explosion in its debt.
Keywords: Public debt, Explosive behavior, Recursive unit root test, Africa
JEL Classification: C22, E62, H63, N17
Public debt bubbles and long memory effects, Submitted to European Journal of Comparative Economics
This paper tests, through an ARFIMA model, the presence of long memory phenomena on public debt series for the period 1995-2020. Also, using detrended multifractal analysis fluctuation analysis much more robust, we will measure not only the long-term correlation, but also the multifractal characteristics as well as the asymmetry. Four countries, namely France, Germany, Italy and the USA, are studied. Firstly, we determine the periods of explosive public debt in each of studied economy. Secondly, we show that shocks, like the subprime mortgage crisis or the Covid-19 crisis, are persistent and accumulate over time. Thirdly, we assert that long-term dependency is due to structural breaks inside public debt series. We can then assert that a debt accumulation can be distinguished on the one side by a cyclical shock that can be quickly absorbed, and on the other side by a structural accumulation that tends to be more persistent. Our results make it possible to anticipate what the dynamics of the public debt should be, once the coronavirus pandemic will be over.
Keywords: Covid-19, Long memory, Public debt, Debt bubble, Multifractality
JEL classification: C12, C22, E61, G01