Considering the economies of North Africa, the purpose of this research is to study the role\r\nof external debt in the financing of economic development. In particular, this paper\r\nexamines the relationship between external debt and economic growth in North African\r\neconomies. In fact, in recent years the south of the Mediterranean knows significant\r\nchanges dictated mainly by the crisis of European sovereign debt and the large social\r\nmanifestations in some Arabic countries. Foremost among these challenges is the issue of\r\nexternal debt and its role in financing economic development. The study was modelled on\r\nPatillo and al., (2002) and uses the technical panel. Combining the leading ratios of external\r\ndebt and the main determinants of economic growth, we have verified the existence of an\r\noptimal threshold beyond which the external debt slows economic growth (there is a curve\r\nLaffer debt). For the North African countries, the empirical study shows that the external\r\ndebt is not an obstacle to development when it contained within reasonable limits.\r\nContrary, it can help these countries to strengthen their growth. However, an increase in\r\ndebt service has a negative impact on economic growth and the transmission channel of\r\nthis impact depends on the quality of the investment and the debt burden. Overall, the\r\ngenerated results suggest a nonlinear relationship between debt and growth: there is a\r\ncritical threshold that would make a negative economic growth. This threshold, which\r\ncorresponds to the marginal impact of debt on growth, reached 47% of GDP. The question\r\nremains whether public debt is indeed associated with higher growth below this turning\r\npoint.
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