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When does public debt impair economic growth? A literature review in search of a theory

Roberto Tamborini () and Matteo Tomaselli

No 2020/7, DEM Working Papers from Department of Economics and Management

Abstract: Beyond inconclusive empirical research, this paper examines the theoretical literature concerning public debt and economic growth finding no univocal and straightforward answer. No meaningful assessment of debt and its effect on growth at any point in time is possible without reference to the whole debt trajectory and the specific state of the economy along the trajectory. An orderly and consistent analysis may be developed along two coordinates of debt assessment: sustainability/ unsustainability, and efficiency/inefficiency. In our view, research should concentrate on the study of specific conditions and cases, and abandon the pursuit of a general law.

Keywords: Public debt; Debt burden; Debt sustainability; Economic growth; Endogenous growth models (search for similar items in EconPapers)
JEL-codes: E62 H63 O40 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-gro and nep-mac
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Handle: RePEc:trn:utwprg:2020/7