Does the Reinhart-Rogoff Hypothesis Apply to China?

Yu Hsing
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Yu Hsing: Southeastern Louisiana University

Economics Bulletin, 2020, vol. 40, issue 4, 2663-2668

Abstract: This paper finds that the threshold of the government debt ratio for China is 33.638%. A higher debt ratio would raise the growth rate if the debt ratio is up to 33.638% whereas a higher the debt ratio would reduce the growth rate if the debt ratio is greater than 33.638%. In addition, a higher ratio of employment change to GDP or a higher investment-to-GDP ratio raises the growth rate. Therefore, the debt threshold of 90% proposed by Reinhart and Rogoff does not apply to China.

Keywords: fiscal policy; government debt; economic growth; Reinhart-Rogoff hypothesis (search for similar items in EconPapers)
JEL-codes: E6 H6 (search for similar items in EconPapers)
Date: 2020-10-12
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