On the Debt-Growth Relationship and Related GMM Issues

Gianni Carvelli ()
Additional contact information
Gianni Carvelli: Department of Economic and Social Sciences, Catholic University of the Sacred Heart, Piacenza

Rivista Internazionale di Scienze Sociali, 2024, vol. 132, issue 3, 235-303

Abstract: This article examines the effects of public debt on aggregate growth and some of its main channels utilising a larger dataset than those employed in most pre-COVID studies. We build a conditionalconvergence framework by performing a panel analysis that accommodates the autoregressive behaviour of the response variable. We discuss the difference-GMM and system-GMM techniques, focusing on critical issues inherent to such methods within the context of the debt-growth analyses, especially as concerns the internal instrument proliferation that typically arises when T is large. The estimates suggest that public debt adversely affects aggregate growth, productivity and capital accumulation, especially over the five-year horizon. However, the marked differences between advanced and emerging economies, along with crucial methodological issues typically associated with GMM approaches in macroeconomic frameworks, prompt crucial questions about the reliability of such techniques in analysing the debt-growth nexus and in generalising the resulting findings and policy recommendations.

Keywords: Difference-GMM; Economic growth; Panel data modelling; Public debt; System-GMM (search for similar items in EconPapers)
JEL-codes: C33 E62 H63 O47 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://riss.vitaepensiero.it/scheda-articolo_digi ... 003_0235-396608.html
Yes

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:vep:journl:y:2024:v:132:i:3:p:235-303

Access Statistics for this article

Rivista Internazionale di Scienze Sociali is currently edited by Maurizio Baussola

More articles in Rivista Internazionale di Scienze Sociali from Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore
Bibliographic data for series maintained by Vep - Vita e Pensiero ().