Economics at your fingertips  

On the heterogeneous link between public debt and economic growth

Marta Gómez-Puig, Simon Sosvilla-Rivero and Inmaculada Martínez-Zarzoso

Journal of International Financial Markets, Institutions and Money, 2022, vol. 77, issue C

Abstract: We use panel data for 115 countries over the period 1995–2016 to model the heterogeneity of the debt-growth nexus along with the underlying factors that might explain it. The grouped fixed effect (GFE) estimator is used to endogenously classify countries into groups and a multinomial logit model is employed to explore the drivers of the detected heterogeneity. The GFE estimator classifies countries into five groups for which debt has different impacts on growth. According to our results, the likelihood of a strong impact is moderated by the quality of the institutions and the proportion of productive expenditure but intensified by the level of indebtedness and the maturity of the debt.

Keywords: Public debt; Economic growth; Heterogeneity; Grouped fixed effects; Panel data; Multinomial logit regression (search for similar items in EconPapers)
JEL-codes: C23 F33 H63 O47 O52 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.intfin.2022.101528

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2024-02-12
Handle: RePEc:eee:intfin:v:77:y:2022:i:c:s1042443122000208