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The Non-Linear Relationship Between Economic Growth and Public Debt

Author

Listed:
  • Karim Bouchrara

    (IHEC Carthage Business School, Tunisia)

  • Houssem Rachdi

    (IHEC Carthage Business School, Tunisia & IPAG Business School, Paris, France)

  • Khaled Guesmi

    (Center of Research for Energy and Climate Change, Paris School of Business, France)

Abstract

This paper examines the non-linear relationship between public debt and economic growth while controlling for governance quality in a sample of 36 countries over the period 1990-2013 using a Panel Smooth Transition Regression (PSTR) framework. We document clear evidence of non-linearity in the impact of public debt on economic growth. Results from the PSTR model show that institutional quality including the level of respect for rules of law, low level of corruption and government stability influences the level of public debt, and its impact on economic growth.

Suggested Citation

  • Karim Bouchrara & Houssem Rachdi & Khaled Guesmi, 2020. "The Non-Linear Relationship Between Economic Growth and Public Debt," Economics Bulletin, AccessEcon, vol. 40(3), pages 2336-2343.
    • Handle: RePEc:ebl:ecbull:eb-19-00825
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    References listed on IDEAS

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    Citations

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    Cited by:

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    2. Onuoha, Favour Chidinma & Dimnwobi, Stephen Kelechi & Okere, Kingsley Ikechukwu & Ekesiobi, Chukwunonso, 2023. "Funding the green transition: Governance quality, public debt, and renewable energy consumption in Sub-Saharan Africa," Utilities Policy, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Public Debt; Institutional Quality ; Economic Growth; PSTR;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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