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Is the Rising Public Debt a Threat to the US Economic Growth? An Empirical Investigation Using ARDL Approach

Author

Listed:
  • Yixiao Jiang

    (Western New England University)

  • George Zestos

    (Christopher Newport University)

  • Robert Winder

    (Christopher Newport University)

  • Alex Hamed

    (Christopher Newport University)

Abstract

This study attempts to determine the relationship between the public debt-to-gross domestic product (GDP) ratio and the rate of real economic growth in the United States using a quadratic autoregressive distributed lag (ARDL) model. Based on the data from 1960 to 2019, the authors find that further expanding national debt will restrain economic growth after the level of public debt exceeds 64% of GDP. A series of Granger causality tests reveal that the debt-to-GDP ratio Granger causes GDP growth, but indirectly through the interest rate. The results indicate that one way to mitigate the downside of expanding national debt is to meticulously manage interest rate risk.

Suggested Citation

  • Yixiao Jiang & George Zestos & Robert Winder & Alex Hamed, 2025. "Is the Rising Public Debt a Threat to the US Economic Growth? An Empirical Investigation Using ARDL Approach," Springer Proceedings in Business and Economics,, Springer.
  • Handle: RePEc:spr:prbchp:978-3-031-76658-9_19
    DOI: 10.1007/978-3-031-76658-9_19
    as

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