5.2 INTERPRETATION
OF FINDINGS AND RECOMMENDATIONS OF ECONOMIC POLICIES
This section is devoted to explaining the results obtained in
order to learn from Togo's debt and make suggestions to debt actors.
The pattern of Togo's debt seems to be well explained by the
proposed model with a 95% confidence degree / level. We will try to emphasize
in this part on the interpretation of model results, the implication of
economic policies from the analysis of previous curves above and those arising
from the interpretation of the model, and then recommendations will follow.
5.2.1 Interpretation of results
5.2.1.1 Results of
estimations and interpretation of error correction coefficient
5.2.1.1.1 Estimation results
The results of the estimation of the model (ECM) are given in
the table below:
Summary of the estimation and calculation of elasticity:
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Dependent Variable: D(LDTPIB)
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Method: Least Squares
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Variable
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Coefficient
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Elasticités
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Prob.
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Court terme
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Long terme
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LDTPIB(-1)
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- 0.978852
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0.0002
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D(LTCH)
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0.558390
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0.558390***
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0.0003
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LTCH(-1)
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0.554834
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0.5668***
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0.0022
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LMPIB(-1)
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0.177077
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0.1809**
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0.0301
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D(LMPIB)
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0.297150
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0.297150***
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0.0020
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D(LPOP)
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- 1.019847
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-1.019847**
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0.0347
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LPOP(-1)
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- 1.549542
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- 1.5830***
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0.0000
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D(LPIBH)
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- 0.780145
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-0.780145***
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0.0003
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LPIBH(-1)
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- 0.591862
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- 0.6046***
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0.0005
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D(LDSEX)
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0.146342
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0.146342***
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0.0003
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LDSEX(-1)
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- 0.037082
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0.1574
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DUM94
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0.686178***
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0.0000
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C
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9.373836
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0.0001
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R-squared
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0.938316
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n
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29
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Durbin-Watson stat
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2.035061
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Prob(F-statistic)
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0.000001
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***(**) indicates that the significance level is 1% (5%)
Source: Author based on the results obtained on
Eviews5
The equation estimated is:
D(LDTPIB) = -0.979*LDTPIB(-1) + 0.558*D(LTCH) +
0.555*LTCH(-1) + 0.177*LMPIB(-1)
(-4.96)
(4.69) (3.69) (2.40)
+ 0.297*D(LMPIB) - 1.019*D(LPOP) -
1.549*LPOP(-1) - 0.780*D(LPIBH)
(3.73) (-2.32)
(-6.17) (-4.68)
- 0.592*LPIBH(-1) +
0.146*D(LDSEX) - 0.037*LDSEX(-1) + 0.686*DUM94 + 9.374 (-4.42)
(4.61) (-1.49) (6.57) (5.26)
( ) represents the statistics t
5.2.1.1.2 Interpretation of the Error
correction model
The Coefficient associated with the restoring force is
negative (-0.978852) and significantly different from zero at statistic
threshold of 5%. Its probability is equal to 0.0002 and less than 0.05. There
is therefore a mechanism for error correction.
In the long -term, imbalances between the debt ratios, the
exchange rate of the CFA expressed in dollars, GDP per capita, population,
imports relating to GDP and the debt service to exports ratio offset so that
their series have similar trends.
The coefficient - 0.978852 reflects the speed at which the
imbalance between the desired and actual levels of debt is absorbed in the year
following the shock. This means that we can happen to adjust 97.8852% of the
imbalance between the actual and desired levels of the external indebtedness of
Togo.
Thus, the shocks impacts on the external debt of Togo are
corrected at 97.8852% by the «feed-back» effect. In other words, a
shock observed during a year is completely absorbed after one year and one
month (1/0.978852 = 1.0216049 years).
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