The DDT Effect: The case of Economic Growth, Public Debt and Democracy Relationship

Philip Adom

MPRA Paper from University Library of Munich, Germany

Abstract: This study contributes to the research on the economic growth, public debt and democracy relationship using the case of Ghana. We posit that, (1) the capacity of a country to tolerate higher debt is dependent on the quality of institutions, and (2) the growth enhancing effect of democracy depends on the initial debt levels. The results point to an inverse relationship between the quality of institution and the capacity of the country to tolerate higher debt. Further, the growth enhancing effect of democracy is crucially dependent on the initial debt-to-GDP ratio. Several robustness checks conducted confirmed these results.

Keywords: Economic growth; Public debt; Democracy (search for similar items in EconPapers)
JEL-codes: H63 O4 O43 (search for similar items in EconPapers)
Date: 2016-11-11, Revised 2016-11-11
New Economics Papers: this item is included in nep-afr and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75022

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