Debt and Growth Revisited
Abstract
In a recent paper, we studied economic growth and inflation at different levels of government and external debt. The public discussion of our empirical strategy and results has been somewhat muddled. Here, we attempt to clarify matters, particularly with respect sample coverage (our evidence encompasses forty-four countries over two centuries--not just the United States), debt-growth causality (our book emphasizes the bi-directional nature of the relationship), as well as nonlinearities in the debt-growth connection and thresholds evident in the data (absolutely central points that seem to have been lost in some commentary.) In addition to clarifying the earlier results, this paper enriches our original analysis by providing further discussion of the high debt (over 90 percent of GDP) episodes and their incidence. Some of the implications of our analysis, including for the United States, are taken up in the final section.Download Info
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24376.Length:
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:pra:mprapa:24376
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Related research
Keywords: debt; growth; crisis; advanced economies; historical;Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F30 - International Economics - - International Finance - - - General
- N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-21 (All new papers)
- NEP-FDG-2010-08-21 (Financial Development & Growth)
- NEP-MAC-2010-08-21 (Macroeconomics)
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jaejoon Woo & Manmohan S. Kumar, 2010. "Public Debt and Growth," IMF Working Papers 10/174, International Monetary Fund.
- Bruno, Michael & Easterly, William, 1998.
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544, Board of Governors of the Federal Reserve System (U.S.).
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- Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany.
- Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-25, August.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Ugo Panizza & Andrea Filippo Presbitero, 2013.
"Public Debt and Economic Growth in Advanced Economies: A Survey,"
Mo.Fi.R. Working Papers
78, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- Ugo Panizza & Andrea F. Presbitero, 2013. "Public Debt and Economic Growth in Advanced Economies: A Survey," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 149(II), pages 175-204, June.
- Andrea F. Presbitero, 2010.
"Total Public Debt and Growth in Developing Countries,"
Development Working Papers
300, Centro Studi Luca d\'Agliano, University of Milano.
- Andrea F Presbitero, 2012. "Total Public Debt and Growth in Developing Countries," The European Journal of Development Research, Palgrave Macmillan, vol. 24(4), pages 606-626, September.
- Andrea Filippo Presbitero, 2010. "Total public debt and growth in developing countries," Mo.Fi.R. Working Papers 44, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2011.
"A Decade of Debt,"
Peterson Institute Press: All Books,
Peterson Institute for International Economics, number 6222, 1st quart.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "A Decade of Debt," NBER Working Papers 16827, National Bureau of Economic Research, Inc.
- Reinhart, Carmen & Rogoff, Kenneth, 2011. "A Decade of Debt," CEPR Discussion Papers 8310, C.E.P.R. Discussion Papers.
- Nicholas Apergis & Arusha Cooray, 2013. "Forecasting fiscal variables: Only a strong growth plan can sustain the Greek austerity programs-Evidence from simultaneous and structural models," CAMA Working Papers 2013-25, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
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