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Impact of public debt on economic growth: a quantile regression approach

This study aimed at investigating the nexus between government debt and its determinants in the context of sustainable economic growth for 97 countries over the period from 2004 to 2018 by employing a panel data quantile regression and comparing it across a fixed-effects model and a generalized meth...

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Main Authors: San, Chen Kong, Chin, Lee
Format: Article
Published: SAGE Publications 2023
Online Access:http://psasir.upm.edu.my/id/eprint/108312/
https://journals.sagepub.com/doi/10.1177/22779787231207218
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spelling my.upm.eprints.1083122025-03-05T01:33:30Z http://psasir.upm.edu.my/id/eprint/108312/ Impact of public debt on economic growth: a quantile regression approach San, Chen Kong Chin, Lee This study aimed at investigating the nexus between government debt and its determinants in the context of sustainable economic growth for 97 countries over the period from 2004 to 2018 by employing a panel data quantile regression and comparing it across a fixed-effects model and a generalized method of moments (GMM) model. The different touches of debt on economic growth were analysed. The quantile regression estimates revealed that government debt has various impacts on economic growth, relying on the degree of economic performance. Government debt negatively affects economic growth across all the quantiles. More interestingly, the quantile regression estimates indicated that in countries with a very low level of real GDP per capita growth, government debt has a stronger pernicious effect on economic growth compared to upper-middle and high-income countries. Hence, our results provided insightful information for policy makers in designing appropriate fiscal policies particularly for low- and lower- middle-income countries to mitigate the negative effect on economic growth, and it should be maintained at a low and reasonable level to promote sustainable economic growth. JEL Classification: E61, E62, E63, H63, O4, O40 SAGE Publications 2023 Article PeerReviewed San, Chen Kong and Chin, Lee (2023) Impact of public debt on economic growth: a quantile regression approach. South Asian Journal of Macroeconomics and Public Finance, 12 (2). pp. 250-278. ISSN 2277-9787; eISSN: 2321-0273 https://journals.sagepub.com/doi/10.1177/22779787231207218 10.1177/22779787231207218
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description This study aimed at investigating the nexus between government debt and its determinants in the context of sustainable economic growth for 97 countries over the period from 2004 to 2018 by employing a panel data quantile regression and comparing it across a fixed-effects model and a generalized method of moments (GMM) model. The different touches of debt on economic growth were analysed. The quantile regression estimates revealed that government debt has various impacts on economic growth, relying on the degree of economic performance. Government debt negatively affects economic growth across all the quantiles. More interestingly, the quantile regression estimates indicated that in countries with a very low level of real GDP per capita growth, government debt has a stronger pernicious effect on economic growth compared to upper-middle and high-income countries. Hence, our results provided insightful information for policy makers in designing appropriate fiscal policies particularly for low- and lower- middle-income countries to mitigate the negative effect on economic growth, and it should be maintained at a low and reasonable level to promote sustainable economic growth. JEL Classification: E61, E62, E63, H63, O4, O40
format Article
author San, Chen Kong
Chin, Lee
spellingShingle San, Chen Kong
Chin, Lee
Impact of public debt on economic growth: a quantile regression approach
author_facet San, Chen Kong
Chin, Lee
author_sort San, Chen Kong
title Impact of public debt on economic growth: a quantile regression approach
title_short Impact of public debt on economic growth: a quantile regression approach
title_full Impact of public debt on economic growth: a quantile regression approach
title_fullStr Impact of public debt on economic growth: a quantile regression approach
title_full_unstemmed Impact of public debt on economic growth: a quantile regression approach
title_sort impact of public debt on economic growth: a quantile regression approach
publisher SAGE Publications
publishDate 2023
url http://psasir.upm.edu.my/id/eprint/108312/
https://journals.sagepub.com/doi/10.1177/22779787231207218
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score 13.244413

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