The impact of public external debt on economic growth in Morocco, Egypt and Ecuador: ARDL economic model , and why these countries can’t converge to a developed country?

The research intends to improve the existing knowledge on the debt-growth nexus by analyzing the link between different countries, in our case between Morocco, Egypt and Ecuador. Scholars have debated the influence of external debt on economic growth since the debt crisis that began in the 1980s. This article investigates how external debt impacts the economic growth of selected deeply indebted countries via the debt overhang and debt crowding out effect. This is accomplished by analyzing data from three deeply indebted countries around the world from 1970 to 2023.The estimation results suggest that external debt influences economic development through debt overhang. Furthermore, to highlight debt servicing effect, The article discovered that the selected countries do not pay (serve) more than 95% of their total debt. We used a deductive approach based on a thorough literature review that incorporated both theoretical and empirical data. We then conducted an economic analysis using the ARDL model to assess the impact of public debt (domestic and foreign) on Morocco’s, Egypt’s and Ecuador’s economic growth. We gathered annual data from 1975 to 2023 to conduct an experimental study. This empirical study used the ARDL model to examine how external debt, capital formation, population growth, and inflation affect economic growth. The model also looked at the precise mechanisms via which public debt affects the economy.