Public debt and growth: Heterogeneity and non-linearity
A study of the long-run relationship between public debt and growth in a large panel of countries
Abstract
The authors study the long-run relationship between public debt and growth in a large panel of countries. Their analysis builds on theoretical arguments and data considerations in modelling the debt鈥揼rowth relationship as heterogeneous across countries. They investigate the debt鈥揼rowth nexus adopting linear and non-linear specifications, employing novel methods and diagnostics from the time-series literature adapted for use in the panel. They 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.
This work is part of the 鈥楳acroeconomics in Low-income countries鈥� programme鈥�
Citation
Markus Eberhardt, Andrea F. Presbitero, Public debt and growth: Heterogeneity and non-linearity, Journal of International Economics, Volume 97, Issue 1, 2015, Pages 45-58,https://doi.org/10.1016/j.jinteco.2015.04.005.