Public Debt and Economic Growth in Emerging Market Economies
23 Pages Posted: 13 Jun 2014
Date Written: June 12, 2014
This paper studies the relationship between public debt and economic growth for selected emerging markets performing panel data estimations. Several regressor variables are included, but the main focus is on public debt. The results reveal a significant positive correlation between public debt and the subsequent growth rate of per capita GDP. Population and investment also yield a significant positive influence on subsequent growth, whereas the initial real GDP per capita gives a negative influence. Other variables such as the inflation rate, the trade balance or the exchange rate do not render a significant effect with respect to economic growth.
Keywords: public debt, economic growth, emerging markets, empirics
JEL Classification: E62, H63
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