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Analysis of Sustainability of Fiscal Policy and Democratic Transition: Case of Tunisia

Author

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  • Zeineb Gouasmi

    (University of Carthage)

  • Houda Haffoudhi

    (University of Carthage)

Abstract

Since 2011, Tunisia experienced a democratic transition, which upset the economic recovery. So, the main aim of this paper is to assess the sustainability of fiscal policy, considering Tunisia’s main macroeconomic variables. To this end, we applied two studies to analyze this policy over the period from 1970 to 2015. First, in the former study, sustainability was examined by a stationarity and cointegration econometric approach. Then the second study is based on an accounting approach in terms of threshold. The first study showed the non-sustainability of the public debt. This result was confirmed by the second approach. This study showed that the stimulus policy, “go and stop” undertaken by the transition government explains mostly the deterioration of the public debt and the deterioration of the main economic indicators.

Suggested Citation

  • Zeineb Gouasmi & Houda Haffoudhi, 2020. "Analysis of Sustainability of Fiscal Policy and Democratic Transition: Case of Tunisia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 512-529, June.
    • Handle: RePEc:spr:jknowl:v:11:y:2020:i:2:d:10.1007_s13132-018-0558-5
    DOI: 10.1007/s13132-018-0558-5
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    More about this item

    Keywords

    Fiscal policy; Budget deficit; Sustainability; Democratic transition;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • P3 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions

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