Public debt and growth: heterogeneity and non-linearity

Eberhardt, Markus; Presbitero, Andrea F.

Abstract

We study the long-run relationship between public debt and growth in a large panel of countries. Our analysis builds on theoretical arguments and data considerations in modelling the debt-growth relationship as heterogeneous across countries. We investigate the debt-growth nexus adopting linear and non-linear specifications, employing novel methods and diagnostics from the time-series literature adapted for use in the panel. We find some support for a negative relationship between public debt and long-run growth across countries, but no evidence for a similar, let alone common, debt threshold within countries.

Citation

Eberhardt, M., & Presbitero, A. F. (2015). Public debt and growth: heterogeneity and non-linearity. Journal of International Economics, 97(1), https://doi.org/10.1016/j.jinteco.2015.04.005

• Journal Article Type: Article
• Acceptance Date: Apr 25, 2015
• Online Publication Date: Apr 29, 2015
• Publication Date: Sep 30, 2015
• Deposit Date: Aug 5, 2015
• Publicly Available Date: Aug 5, 2015
• Journal: Journal of International Economics
• Print ISSN: 0022-1996
• Electronic ISSN: 0022-1996
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 97
• Issue: 1
• DOI: https://doi.org/10.1016/j.jinteco.2015.04.005
• Keywords: public debt, debt threshold, economic growth
• Public URL: https://nottingham-repository.worktribe.com/output/760197
• Publisher URL: http://www.sciencedirect.com/science/article/pii/S0022199615000690#
• Related Public URLs: http://www.sciencedirect.com/science/MiamiMultiMediaURL/1-s2.0-S0022199615000690/1-s2.0-S0022199615000690-mmc1.pdf/271695/html/S0022199615000690/3a1ffa20b5ea2cc05809246c068b8052/mmc1.pdf