Innovation, Public Debt and Monetization: an Empirical Analysis

Sara D'Andrea

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores the relationship between public debt and technological innovation through panel threshold regressions on a sample of 15 industrialized countries from 2000 to 2019. It also asks what impact debt monetization (expressed as the amount of debt held at the central bank) has on this nexus. Our results show strong nonlinearities in the sense that an increase in debt above a certain threshold negatively impacts the rate of innovation, while below it has positive effects. Monetizing debt contributes positively to innovation if it is below the "debt turning point", while this becomes detrimental for debt-to-GDP ratios above the threshold. The same inverted-U-shaped relationship is found between the monetization rate and innovation rate.

Keywords: Public debt; Innovation; Debt monetization; Panel threshold regression (search for similar items in EconPapers)
JEL-codes: C23 E58 H60 O47 (search for similar items in EconPapers)
Date: 2023-06-03
New Economics Papers: this item is included in nep-cba, nep-fdg and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/117520/1/manuscript_empirical_2ndversion.pdf original version (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:pra:mprapa:117520

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().