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An empirical characterization of the effects of public debt on economic growth

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Ramos-Herrera, María del Carmen and Sosvilla-Rivero, Simón (2017) An empirical characterization of the effects of public debt on economic growth. Applied Economics, 49 (35). pp. 3495-3508. ISSN 1466-4283

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Official URL: http://dx.doi.org/10.1080/00036846.2016.1262522



Abstract

Based on a data set of 115 economies, this article empirically investigates the relation between public debt and economic growth. Using the World Bank’s classification for income groups, we initially find that those countries that present the lowest public debt are characterized by the highest economic growth, while the smallest growth rates are associated with the highest public debt. Nevertheless, this conclusion is tempered when we analyse the countries by income level: low-income countries have a different behaviour with respect to lower-middle, upper-middle and high-income countries. When using the IMF’s country classification, the results do not suggest a clear pattern in the public debt–economic growth nexus across different countries, but indicate a heterogeneous relationship between such key macroeconomic variables.


Item Type:Article
Uncontrolled Keywords:Public debt; Economic growth.
Subjects:Social sciences > Economics > Economic development
Social sciences > Economics > Econometrics
Social sciences > Economics > Public economy
JEL:C32, H63, O40, O57
ID Code:57229
Deposited On:04 Oct 2019 12:16
Last Modified:11 Feb 2020 08:54

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