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Rising Public Debt to GDP Can Harm Economic Growth

Author

Listed:
  • Alexander Chudik
  • Kamiar Mohaddes
  • M. Hashem Pesaran
  • Mehdi Raissi

Abstract

The debt?growth relationship is complex, varying across countries and affected by global factors. While there is no simple universal threshold above which debt to GDP significantly depresses growth, high and rising public debt burdens slow growth in the long term, data from the past four decades indicate.

Suggested Citation

  • Alexander Chudik & Kamiar Mohaddes & M. Hashem Pesaran & Mehdi Raissi, 2018. "Rising Public Debt to GDP Can Harm Economic Growth," Economic Letter, Federal Reserve Bank of Dallas, vol. 13(3), pages 1-4, March.
    • Handle: RePEc:fip:feddel:00058
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Fiscal Sustainability: A Primer
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2018-07-02 12:02:05

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    Cited by:

    1. Usman Saleem Yousaf & Babar Aziz, 2024. "Unveiling the relationship between the optimal debt threshold level and debt-economic growth in selected indebted countries: panel threshold analysis," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(5), pages 5003-5025, October.
    2. Busato, Francesco & Varlese, Monica & Ulloa Severino, Claudia, 2022. "Public debt heterogeneity at country level: an empirical analysis," MPRA Paper 113812, University Library of Munich, Germany.
    3. Yang Li & Hu WenXiu & Su ZhenXing, 2023. "Impact of Local Official Corruption on Local Government Debt in China: The Mediating Role of Government Investment Efficiency," SAGE Open, , vol. 13(3), pages 21582440231, July.
    4. Pratibha Saini & Krishna Muniyoor, 2021. "Revisiting The Debt–Growth Nexus: Evidence From India," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 66(231), pages 151-172, October –.
    5. Karfakis, Ioannis, 2021. "The predictive content of public debt for real output expansions and contractions over three centuries: A Markov switching analysis for the UK," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).
    6. Agatha Nkem Amadi & Isaac Azubuike Ogbuji & Hope Agbonrofo, 2020. "The Maturity and Repayment Structure of Sovereign Debt: Implications for Development Agenda in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(1), pages 115-120, March.

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