The Effect of the Public Debt on Economic Growth in Sri Lankan Economy

2015 ◽  
Author(s):  
P. J. Kumarasinghe ◽  
P. R. P. Purankumbura
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Sri Lankan ◽  
The Public

scholarly journals Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations

2021 ◽  
Vol 13 (11) ◽  
pp. 5954
Author(s):  
Qamar Abbas ◽  
Li Junqing ◽  
Muhammad Ramzan ◽  
Sumbal Fatima
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Negative Impact ◽  
Positive Impact ◽  
Linear Pattern ◽  
The Public ◽  
Mediating Role ◽  
National Output ◽  
State Governance

This paper provides an empirical analysis of the relationship between debt and national output mediated by a measure of the quality of state governance. Using WGIs dataset of 106 countries for the period 1996–2015, the paper analyzes the mediated effect of governance on debt-growth relationship. For this purpose, we use the fixed effect (LSDV) and system GMM estimation technique in order to overcome the possible problem of endogeneity. Results show the non-linear pattern between public debt and economic growth via governance. Although, public debt has negative impact on economic growth, but the results are statistically positive and significant when public debt is interacted with governance, which confirms that governance is a channel by which public debt influences economic growth. Moreover, we calculate the threshold of governance which shows that the public debt has positive impact on economic growth when the governance level is higher than the threshold and adversely affects the economic growth in the case of low level of governance than threshold. Evidence from this study reveals the fact that governance plays a mediating role in debt-growth relationship as there is a pattern of complementarity between public debt and governance: the higher the level of governance, the lesser the adverse effect of public debt on economic growth.

scholarly journals The Impact Of Macroeconomic Factors In Economic Growth

2016 ◽  
Vol 12 (7) ◽  
pp. 331 ◽  
Author(s):  
Alush Kryeziu
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Public Debt ◽  
Budget Deficit ◽  
Econometric Model ◽  
Macroeconomic Factors ◽  
The Public ◽  
Time Period ◽  
Macroeconomic Indicators ◽  
The Impact

In this paper will be discussed the main concepts and trends of the macro-fiscal indicators in economic growth, as well as their importance in the economic development of different countries, with special emphasis in Kosovo. One of the aims of this paper is to define and explain the connection between macroeconomic indicators with specific emphasis: the public debt, budget deficit and inflation on economic growth. In order to analyze this impact of variables in economic growth, the targeted time period of research is the period from 2004 to 2014. While the data taken regarding Kosovo were obtained from the year 2005, due to the fact that earlier the data have been limited because of the developments in which Kosovo went through. The model that best represents the link between macro-fiscal indicators on economic growth is the linear regression as an econometric model. We will have the opportunity to see and interpret these data. The overall results have emerged in accordance with theoretical discussions presented, but this relationship has not turned out to be very strong because the coefficients acquired did not have great explanatory skills for economic phenomena.

Is There a Threshold Effect of Public Debt on Economic Growth?

2019 ◽  
pp. 49-64
Author(s):  
Seher Gulsah Topuz ◽  
Taner Sekmen
Keyword(s):  
Economic Growth ◽  
Linear Relationship ◽  
Public Debt ◽  
Threshold Effect ◽  
Oecd Countries ◽  
Fiscal Policies ◽  
The Public ◽  
Regression Methods ◽  
The Relationship ◽  
Panel Threshold Regression

In this chapter, the relationship between public debt and economic growth is examined for OECD countries. In order to determine this relationship, the data between 2002 and 2016 is analyzed using panel threshold regression methods. The findings of the study suggest that the relationship between public debt and economic growth is linear. The public debt threshold is estimated at 99.75% for OECD countries but it is statistically insignificant. While the public debt to GDP ratio is both below and above this threshold, the effect of public debt on economic growth is negative and statistically significant. There is no evidence of the existence of a non-linear relationship between public debt and economic growth. These findings are expected to guide policymakers in the implementation of fiscal policies.

scholarly journals Trend and Impact of Public Debt in Nepalese Economy

2015 ◽  
Vol 4 ◽  
pp. 85-89
Author(s):  
Yadab Raj Sharma
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
The Public ◽  
The Government

The public debt or public borrowing in Nepal is considered to be an important source of income of the government. Public debt helps to achieve targeted economic growth and to narrow down the gap between expenditure and revenue. However, the country is falling into debt trap in the form of interest and principal payment. In this article an attempt has been made to find out the situation, trend and impact of public debt on Nepalese economy.DOI: http://dx.doi.org/10.3126/av.v4i0.12363Academic Voices Vol.4 2014: 85-89

scholarly journals Empirical Evidence on Factors Conditioning the Turning Point of the Public Debt–Growth Relationship

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 191
Author(s):  
Mindaugas Butkus ◽  
Diana Cibulskiene ◽  
Lina Garsviene ◽  
Janina Seputiene
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Private Consumption ◽  
Turning Point ◽  
Global Financial Crisis ◽  
Government Expenditure ◽  
The Public ◽  
Taxation Policy ◽  
High Expenditure ◽  
The Global Financial Crisis

This paper contributes to the limited literature on the factors conditioning the turning point of the public debt–growth relationship. A decade after the global financial crisis, when the debt ratio in many countries was still above pre-crisis levels, the COVID-19 pandemic again increased the pressure on public finances. It revived the debate on the ability to promote economic recovery through debt-financed government expenditure. However, more intense government borrowing increases its costs and uncertainty about future taxation policy, thus potentially disturbing private consumption, investment, and economic growth. In this paper, we estimate the thresholds of indicators on which the expenditure multiplier depends, which may already imply a risk that public debt will dampen economic growth. We use a methodology of structural threshold regression to examine the varying effects that debt might have on growth using consumption, investment, taxes, and imports as threshold variables, as well as several other factors suggested by previous contributions. The applied methodology allows for the addressing of parameter heterogeneity and endogeneity to be accounted for at the same time. The main results suggest that a positive debt effect is more likely if the conditions for a high expenditure multiplier are met, that an increase in the public-debt-to-GDP ratio is not necessarily deleterious to growth if shares of private consumption and investment in GDP are high, while the tax-revenue-to-GDP ratio is low.

scholarly journals Evolution of Public Debt in Albania during 1990-2017 and its impact on the Economic Growth

2020 ◽  
Vol 4 (1) ◽  
pp. 59
Author(s):  
Amarda Cano
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Cost Of Debt ◽  
Specific Level ◽  
The Public ◽  
Macroeconomic Indicators ◽  
Level Of Economic Development ◽  
Second Tier ◽  
The Cost ◽  
The Empirical Analysis

Public debt is one of the most important macroeconomic indicators due to its impact on the economy of each country. Literature suggests that the effect varies in each country depending on the level of economic development and situation. Public debt will have a direct impact on a country's economic growth, but there are contrasting opinions amongst economists regarding the use of public debt, particularly in situations of distress and in developing countries. Albania is a country that would be in need of a decrease of the debt/GDP ratio. This can be done through a stimulation of the economy rather than a decrease of the public debt. The empirical analysis shows that the increase on real public debt can negatively influence the GDP, yet, we do not observe a specific level above which the effects worsened. Instead, we notie that whenever the public debt was increasing, the cost of debt would sometimes decrease because the governments substitutes the debt borrowed from second tier banks with debt borrowed from the IMF.

scholarly journals Imbalance of the public finance in the context of Keynesian and Non-Keynesian effects of fiscal policy limitation

2017 ◽  
Vol 3 (3) ◽  
pp. 27-32
Author(s):  
Joanna Stawska
Keyword(s):  
Public Finance ◽  
Economic Growth ◽  
Fiscal Policy ◽  
Public Debt ◽  
Statistical Data ◽  
Gdp Growth ◽  
The Public ◽  
Methods Of Analysis ◽  
Restrictive Policy

The purpose of this article is to point out the importance of the size of public debt and deficit in the context of Keynesian and non-Keynesian effects of fiscal policy limitation. To achieve this objective primarily were used methods of analysis of the available literature and presentation of statistical data. Considerations include, among others, the presentation of public debt and deficit in the context of economic growth. Expansionary fiscal policy often caused by economic fluctuations contributes to the deepening of public finance imbalance with frequent decline in GDP growth. The restrictive policy has an influence on improving the situation of the public finance sector in the long-term with at least moderate economic growth.

scholarly journals Evaluation of the Non-Linear Effects of the Public Debt on the Economic Growth of the WAEMU

2020 ◽  
Vol 5 (2) ◽  
pp. p63
Author(s):  
Moussa SIGUE ◽  
Moussa COULIBALY
Keyword(s):  
Economic Growth ◽  
Quadratic Form ◽  
Public Debt ◽  
Institutional Quality ◽  
Economic Conditions ◽  
Macroeconomic Policies ◽  
The Public ◽  
Non Linear ◽  
Linear Effects ◽  
The Relationship

The aim of this article is to analyse the nature of the relationship between public debt and economic growth in the WAEMU. A standard growth model was specified and then estimated in quadratic form from the GMM (GMM). The results show a non-linear relationship between public debt and economic growth. Thus, public debt stimulates economic growth when it does not exceed the threshold of 15% of GDP. Robustness tests show that public debt is boosting the economic conditions of countries with sound macroeconomic policies and good institutional quality.

scholarly journals The Relationship between Public Debt and Economic Growth in Albania and Other Countries

2018 ◽  
Vol 7 (3) ◽  
pp. 95-102
Author(s):  
Eneida Përmeti Çifligu
Keyword(s):  
Economic Growth ◽  
International Monetary Fund ◽  
Public Debt ◽  
The Public ◽  
The World ◽  
Ministry Of Finance ◽  
The Relationship ◽  
The International Monetary Fund

Abstract The purpose of this study is the relationship between public debt and economic growth in Albania in post-dictatorships. Many authors have analyzed the mutual link between economic growth and public debt and the results and the methodologies are different in different countries and periods. Let’s see what data are specifically about these two indicators (provided by the Ministry of Finance, the Bank of Albania and the International Monetary Fund). Does the public debt performance affects the trend of the economic growth or not? I have mentioned what are the main events and phenomena in Albania, in Europe and in the World that have affected the Albanian economy. For these years, I have made comparisons with situations in other countries.

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