A look at the controversy of whether high government debt constrains economic growth issues of crowding out, fiscal expansion, do bond yields rise keynesian and free-market perspectives. This paper investigates the average impact of government debt on per-capita gdp growth in twelve euro area countries over a period of about 40 years starting in 1970 it finds a non-linear impact of debt on growth with a turning point —beyond which the government debt-to-gdp ratio has a deleterious impact on long-term. Abstract the study investigates the effect of public debt on economic growth in kenya, between 1980-2013the choices of period was guided by data availability and escalation of kenya's public debt the main problem is that, kenya government has been relying heavily on public debt, aid and grants as a source of. This study examined the impact of public debt on economic development of nigeria using annual time series data spanning 1986 to 2014 the study employed the augmented dickey-fuller test, johansen co-integration test, error correction method (ecm) and the granger causality test the johansen co- integration test. Reduced public investment as the federal debt increases, the government will spend more of its budget on interest costs, increasingly crowding out public investments over the next 10 years, cbo estimates that interest costs will total $52 trillion under current law in just under a decade, interest on the debt will be the third.
Abstract the paper attempts to empirically explore the transmission mechanism regarding the short- term impact of public debt and growth we examine and evaluate the direct effect of higher indebtedness on economic growth for countries in the eu which are in the epicentre of the current sovereign debt crisis. The public debt is how much a government owes to creditors outside of itself here are pros and cons, how it's measured, and when it's too high. The impact of public debt on economic development of nigeria abula matthew1 and ben daddy mordecai1 1department of economics, faculty of social sciences, kogi state university, nigeria authors' contributions this work was carried out in collaboration between both authors author am designed. Our results show evidence of the different debt‐growth nexus under the different degrees of country risk under a high‐risk environment, a country's economic growth is harmed by raising its public debt the negative effects public debt has on economic growth become weak under low political and.
As debt grows and its role as a major instrument for financing government needs is enhanced, debt management decisions become very important as part of a fiscal strategy considering that public debt management has fundamental effects on public finances, any attempt to determine the country's financing scheme in the. This study examines the impact of public debt on economic growth by taking other control variables like institutional credit and commercial electricity consumption it uses panel data of 14 major (non-special category) states in india for the period 1980-81 to 2013-14 after establishing long-run relationship among the. In government indebtedness in some advanced economies following the global financial crisis economists tend to agree that in the short run, an increase in public debt arising from fiscal expansion stimulates aggregate demand, which should help the economy grow the longer-term economic impact of public debt.
Against this background, one important question refers to the economic consequences of a regime of high and potentially persistent public debt while the economic growth rate is likely to have a linear negative impact on the public debt-to-gdp ratio (a decline in the economic growth rate is to be, ceteris paribus, always. Economic consequences of public debt the case of central and eastern european countries irina bilan abstract: the paper aims to empirically assess, using panel data estimation techniques, the effects of public indebtedness on economic growth for a group of 11 central and eastern.
Consequently, the problem of twin deficits emerged and to finance the developmental activities government has to rely on public external and domestic debt the positive effects of public debt relate to the fact that in resource-starved economies debt financing if done properly leads to higher growth and.
Investment as private and government consumption and trade openness affect positively growth on the other hand, there is a negative long-run effect of government debt and population growth on growth furthermore, the study addresses the issue of break effects between government debt and economic. Abstract: in this study we investigate the impact of government debt on the economic growth of ghana adopting the methodology of the simple ordinary least squares with data spanning from 1990 to 2015 ghana has unfortunately found itself in the tragic situation of high external government debt which. The aim of this paper is to study the effects of public debt management on yield curve spreads in brazil, in order to see possible impacts on the country's economic activity state space models, together with kalman filter estimators, are used for the period ranging from june 2002 to february 2012 the results indicate that. Abstract: this paper examines the impact of public debt on the economic growth in advanced economies over a period of 1946 to 2009, using an econometric approach the findings suggested an inverse relationship between public debt and economic growth in advanced economies these relationships were found to be.