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Debt and Growth: Historical Evidence

Author

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  • Christian Breuer

    (Chemnitz University of Technology, Department of Economics, Junior Professorship for European Economics and ZBW - Leibniz Information Centre for Economics)

  • Carsten Colombier

    (FiFo - Institute for Public Economics, University of Cologne, Germany; Federal Finance Department, Bern, Switzerland)

Abstract

In this paper we examine the relationship between public debt and economic growth in a large historical panel dataset of 17 OECD economics over the period 1870 - 2016. We do not provide evidence for a statistically significant and robust relationship between government debt and growth. While our baseline regressions support the "conventional view" that government debt is negatively associated with economic growth, particularly in the aftermath of World War II, these results appear to be not robust to alternative specifications.

Suggested Citation

  • Christian Breuer & Carsten Colombier, 2020. "Debt and Growth: Historical Evidence," Chemnitz Economic Papers 036, Department of Economics, Chemnitz University of Technology, revised Jan 2020.
    • Handle: RePEc:tch:wpaper:cep036
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    More about this item

    Keywords

    Goverment Debt; Economic Growth; Robustness;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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