The Impact of Public Debt on Growth: A Panel Analysis in Selected Countries

Yildirim, Selim; ERDOĞAN, Kadriye Sena

doi:10.14784/marufacd.1145693

Cited by 3 publications

(1 citation statement)

References 23 publications

(4 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The studies executed in Nigeria on public debt and public debt-growth nexus were sparse. Nevertheless, this issue had resulted in extensive studies in other developing and developed economies as evidenced by these researches (Alves, 2014;Atoullo, 2019;Canbek, 2014;Chongo, 2013;Geleta, 2021;Leon et al, 2019;Mosikari & Eita, 2021;Njoroge, 2020;Saungweme, 2020;Soares, 2022;Yildirim & Erdogan, 2021). Akomolafe et al (2015) dwelt on public debt and private investment in Nigeria.…”

Section: Empirical Literaturementioning

confidence: 99%

Does public debt disrupt economic growth in Nigeria? A two-stage least squares approach

Duru,

Fortunatus,

Danjuma

et al. 2023

Economy

View full text Add to dashboard Cite

The impact of Nigeria's public debt on economic growth was investigated in this study. Additionally, it confirmed the validity of Nigeria's debt burden and crowding-out hypotheses. The time series data used ranged from 1981 to 2021. For analysis, the Two-Stage Least Squares and Toda Yamamoto Causality tests were employed. The findings contradicted the debt overhang effect hypothesis by showing that public debt had a positive and significant influence on economic growth. This proves that Nigeria's public debt has no adverse effects on the economic growth of the nation. Additionally, debt service has a detrimental effect on economic growth. This demonstrated that the crowding-out effect, often known as the crowding-out hypothesis, existed in Nigeria. Thus, servicing the national debt has a negative impact on Nigeria's economic expansion. The results of the public debt model, however, showed that trade openness and real gross domestic product had a favourable effect on public debt. A bidirectional relationship between public debt and economic growth was revealed by the findings of the causality test. The results also showed a one-way relationship between debt service and economic growth. As a result, the study implies that the government can simultaneously pursue its two policy goals of economic growth and public debt. Furthermore, decisions about debt repayment in Nigeria should be made in a way that promotes the growth of the economy. Nigeria should also improve institutional performance and boost its macroeconomic policy in the areas of inflation, foreign direct investment, trade, and exchange rates.

show abstract

Section: Empirical Literaturementioning

confidence: 99%

Does public debt disrupt economic growth in Nigeria? A two-stage least squares approach

Duru,

Fortunatus,

Danjuma

et al. 2023

Economy

View full text Add to dashboard Cite

show abstract

The New Sustainable Approach

Sümer

2023

The World Economy and Financial System

View full text Add to dashboard Cite

Government debt and economic impact: An analytical comparison of different countries

Siying

2024

RGC

View full text Add to dashboard Cite

The increase in the level of government debt has led to economic instability in a number of developing as well as developed nations. According to a study by Hilton (2021), having an unsustainable amount of public debt can slow down the economic growth of the nation in the long run. Therefore, it has become increasingly important to understand the economic impact that government debts have on different countries. The countries used in this paper are Brazil, Malaysia, South Africa, Thailand, and Turkey. Firstly, the study analyses the trends of public debt across these five countries. From the analysis, it could be realised that the level of government debt increased across all the countries. Moreover, the study also used a vector error correction model (VECM) methodology along with an impulse response function (IRF) to account for the country-wise impact of public debt on economic growth. The results showed that there is a negative impact on the economic growth of Brazil, Malaysia, Thailand, Turkey, and South Africa. Furthermore, the study also accounts for the impact of fiscal policies on the debt management structure of the specified countries.

show abstract

The Impact of Public Debt on Growth: A Panel Analysis in Selected Countries

Cited by 3 publications

References 23 publications

Does public debt disrupt economic growth in Nigeria? A two-stage least squares approach

Does public debt disrupt economic growth in Nigeria? A two-stage least squares approach

The New Sustainable Approach

Government debt and economic impact: An analytical comparison of different countries

Contact Info

Product

Resources

About