Public debt and financial stability: The case of economic community and monetary union of central Africa (EMCCA) | Zendy

Assoumou Ondo | Zendy

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Public debt and financial stability: The case of economic community and monetary union of central Africa (EMCCA)

Author(s) -

Assoumou Ondo

Publication year - 2017

Publication title -

journal of economics and international finance

Language(s) - English

Resource type - Journals

ISSN - 2006-9812

DOI - 10.5897/jeif2017.0860

Subject(s) - debt , economics , internal debt , financial stability , debt to gdp ratio , debt levels and flows , external debt , financial system , monetary economics , finance

This article analyzes the relationships between public debt and financial stability. Unlike traditional approaches based on linear panels (dynamic or static), we estimate a nonlinear regime change panel (PSTR) characterizing the relationships between public debt and financial stability for the member countries of the Economic Community, and Monetary Union of Central Africa (EMCCA). The results show that the public debt has contrasted effects on financial stability in EMCCA, according to regimes determined by the evolution of the price of oil. Key words: Public debt, financial stability, oil price threshold.

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