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Long-run Relationship Between Government Debt and Growth: the Case of Indonesia

Author

Listed:
  • Hefrizal Handra

    (Department of Economics, Andalas University, Padang, West Sumatra, Indonesia.)

  • Budi Kurniawan

    (Department of Economics, Andalas University, Padang, West Sumatra, Indonesia.)

Abstract

This study examines long-run relationship between the government debt and economic growth in Indonesia. This study uses the Autoregressive Distributed Lag (ARDL) cointegration method. Employing a time series data from 1980 to 2017, this study reveals that there is a negative long-run relationship between the ratio of government debt to GDP and the economic growth. That means the growth of debt ratio to the GDP could lower the growth in a long term.

Suggested Citation

  • Hefrizal Handra & Budi Kurniawan, 2020. "Long-run Relationship Between Government Debt and Growth: the Case of Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 10(1), pages 96-100.
    • Handle: RePEc:eco:journ1:2020-01-12
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    Citations

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    Cited by:

    1. Chen Kong San & Lee Chin, 2023. "Impact of Public Debt on Economic Growth: A Quantile Regression Approach," South Asian Journal of Macroeconomics and Public Finance, , vol. 12(2), pages 250-278, December.
    2. Yabesh Ombwori Kongo & Elvis Kimani Kiano & Joash Ogolla Ogada & Peter Isaboke Omboto, 2023. "The Effect of Debt Service Ratio and Exchange Rate on Public Debt Sustainability in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(11), pages 302-312, November.

    More about this item

    Keywords

    s Economic Growth; Government Debt; Indonesia.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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