A NOTE ON PUBLIC DEBT-PRIVATE INVESTMENT NEXUS IN EMERGING ECONOMIES

Dinci J. Penzin (), Afees Salisu and Benedict N.Akanegbu ()
Additional contact information
Dinci J. Penzin: Central Bank of Nigeria & Nile University
Benedict N.Akanegbu: Nile Universit

Bulletin of Monetary Economics and Banking, 2022, vol. 25, issue 1, 25-36

Abstract: We examine the effect of public debt on private investment in selected emerging economies. Using a panel threshold regression model, we estimate a threshold value of about 3 percent, on average, below which public debt stimulates private investment. Our additional analysis involving selected developed economies suggests that the crowding out effect is less evident relative to the emerging economies as higher public debt stocks do not seem to significantly undermine their private investments. These results have implications for debt sustainability and maintaining a reasonable public debt–GDP ratio is crucial for sustainable investment growth.

Keywords: Debt; Investment, Nonlinearity, Threshold regression models (search for similar items in EconPapers)
JEL-codes: C22 D25 H63 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1881&context=bmeb (application/pdf)

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: https://EconPapers.repec.org/RePEc:idn:journl:v:25:y:2022:i:1b:p:25-36

DOI: 10.21098/bemp.v25i1.1988

Access Statistics for this article

Bulletin of Monetary Economics and Banking is currently edited by Paresh Narayan

More articles in Bulletin of Monetary Economics and Banking from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().