This Time They Are Different: Heterogeneity and Nonlinearity in the Relationship Between Debt and Growth |
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Author:
| Eberhardt, Markus Presbitero, Andrea |
ISBN: | 978-1-306-38368-4 |
Publication Date: | Jan 2013 |
Publisher: | International Monetary Fund
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Book Format: | Ebook |
List Price: | USD $9.00 |
Book Description:
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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 modeling 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...
More DescriptionWe 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 modeling 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 common debt thresholds within countries over time.