This Time They're Different: Heterogeneity;and Nonlinearity in the Relationship;between Debt and Growth

Markus Eberhardt and Andrea Presbitero

No 92, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: We study the long-run relationship between public debt and growth in a large panel of countries. Our analysis takes particular note of theoretical arguments and data considerations in modelling the debt-growth relationship as heterogeneous across countries. We investigate the issue of nonlinearities ('debt thresholds') in both the cross-country and within-country dimensions, employing novel methods and diagnostics from the time-series literature adapted for use in the panel. We find some support for a nonlinear relationship between debt and long-run growth across countries, but no evidence for a common debt threshold within countries over time.

Keywords: common factor model; economic growth; nonlinearity; public debt (search for similar items in EconPapers)
JEL-codes: C23 E62 F34 O11 (search for similar items in EconPapers)
Pages: 63
Date: 2013-12
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir092.pdf First version, 2013 (application/pdf)

Related works:
Working Paper: This Time They Are Different: Heterogeneity and Nonlinearity in the Relationship Between Debt and Growth (2013)
Working Paper: This Time They’re Different: Heterogeneity and Nonlinearity in the Relationship between Debt and Growth (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:92

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