Debt and Growth Revisited
AbstractIn 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24376.
Date of creation: Aug 2010
Date of revision:
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)
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