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Public debt and economic growth: An empirical evaluation

Author

Listed:
  • María del Carmen Ramos-Herrera

    (Department of Quantitative Economics, Universidad Complutense de Madrid)

  • Simón Sosvilla-Rivero

    (Department of Quantitative Economics, Universidad Complutense de Madrid)

Abstract

Based on a data set of 115 economies, this paper empirically investigates the relation between public debt and economic growth. We find that those countries that present low public debt are characterized by higher economic growth, while the smallest growth rates are associated with high public debt. Nevertheless, this conclusion is tempered when we analyse the countries by income level: low-income countries have a different behaviour with respect to lower-middle, upper-middle and high income countries.

Suggested Citation

  • María del Carmen Ramos-Herrera & Simón Sosvilla-Rivero, 2016. "Public debt and economic growth: An empirical evaluation," Working Papers 16-06, Asociación Española de Economía y Finanzas Internacionales.
    • Handle: RePEc:aee:wpaper:1606
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    References listed on IDEAS

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    More about this item

    Keywords

    Public debt; economic growth;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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