Shadow economy threshold effect in the relationship finance–growth in Tunisia: A nonlinear autoregressive distributed lag approach

Abstract

This paper tracks the financial growth in Tunisia over the period 1984–2016 with a special focus on the shadow economy. Using Tanzi's measures, we worked on a nonlinear autoregressive distributed lag (NARDL) model to test the impact of the informal economy. The results suggest that the long‐run effect of the financial growth becomes negative if there is a positive change in the shadow economy and the opposite holds. While changes in the shadow economy have no significant influence on the links between financial development and economic growth in the short run, they play a significant role in the Tunisian economy in the long run.

Exploring the Nexus Between the Shadow Economy, Finance, and Economic Growth in Tunisia

“…Some authors have emphasized the non-linear relationship between financial development and economic growth, but the sources of this non-linearity remain inconclusive (Shen and Lee, 2006;Deidda and Fattouh, 2008;Cecchetti and Kharroubi, 2012;Law and Singh, 2014;Arcand et al, 2015;Ibrahim and Alagidede, 2017;Mhadhbi and Terzi, 2022).…”

Covid-19 impact on financial growth and guidelines for green recovery in BRICS: fresh insights from econometric analysis

“…As far as we know, this is the first study to examine the relationship between financial development, FDI, stock market return and green economic growth in the context of the BRICS nations throughout 2000–2020. This study’s primary contributions are: (Mhadhbi and Terzi 2021 ) The VAR model employed in this article is a combination of FDI and stock market return and is not a study of the development and modifications of a specific system or the one-way effect mechanism of financial development on green economic recovery. The coupling connection between the system and the economic development system is merged, analyzed statistically, and the conclusions are of significant guiding relevance.…”