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.
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