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Karim Bouchrara, Houssem Rachdi and Khaled Guesmi
''The Non-Linear Relationship Between Economic Growth and Public Debt''
( 2020, Vol. 40 No.3 )
This paper examines the non-linear relationship between public debt and economic growth while controlling for governance quality in a sample of 36 countries over the period 1990-2013 using a Panel Smooth Transition Regression (PSTR) framework. We document clear evidence of non-linearity in the impact of public debt on economic growth. Results from the PSTR model show that institutional quality including the level of respect for rules of law, low level of corruption and government stability influences the level of public debt, and its impact on economic growth.
Keywords: Public Debt, Institutional Quality , Economic Growth, PSTR
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
O1 - Economic Development: General
Manuscript Received : Sep 14 2019 Manuscript Accepted : Aug 24 2020

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