The Nexus between Investment, Public Debt, and Economic Growth
1
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
This study, using panel data from 192 countries from 1990 to 2017, empirically analyzes how the effect of investment on economic growth varies as a function of debt level. In developed countries, investment has been shown to promote economic growth, but the channel of debt has not been identified. In the case of developing countries, however, the channel of debt consistently exhibited a statistically significant negative sign, indicating that the positive effect of investment on economic growth was reduced by debt above a certain level (threshold: 159.65%). The policy implication is that, should debt rise beyond a certain level, the positive effect on economic growth can be reduced even when investment is increased. Therefore, managing debt to remain below the threshold is advisable.
Abstract
This study, using panel data from 192 countries from 1990 to 2017, empirically analyzes how the effect of investment on economic growth varies as a function of debt level. In developed countries, investment has been shown to promote economic growth, but the channel of debt has not been identified. In the case of developing countries, however, the channel of debt consistently exhibited a statistically significant negative sign, indicating that the positive effect of investment on economic growth was reduced by debt above a certain level (threshold: 159.65%). The policy implication is that, should debt rise beyond a certain level, the positive effect on economic growth can be reduced even when investment is increased. Therefore, managing debt to remain below the threshold is advisable.
참고문헌 (26)
- Amilcar, S., "Impact of Public Debt on Economic Growth in Advanced Economies", International Journal of Managerial Studies and Research, 4(2), pp.70~76 (2016)
- Arellano, M., "Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations", The Review of Economic Studies, 58(2), pp.277~297 (1991)
- Baliamoune-Lutz, M. N., "Does FDI contribute to economic growth? Knowledge about the effects of FDI improves negotiating positions and reduces risk for firms investing in developing countries", Business Economics, 39(2), pp.49~ (2004)
- Inflation and Economic Growth, "Barro, R", NBER, ~, pp.Working Paper No. 5326 (1995)
- Determinants of Economic Growth: A Cross-Country Empirical Study, "Barro, R. J.", NBER, ~, pp.Working Paper No. 5698 (1996)
- Baum, A., "Debt and growth: New evidence for the euro area", Journal of International Money and Finance, 32, pp.809~821 (2013)
- Bloom D. E., "Implications of Population Ageing for Economic Growth", Oxford Review of Economic Policy, 26(4), pp.583~612 (2010)
- Borensztein, E., "How does foreign direct investment affect economic growth?", Journal of International Economics, 45(1), pp.115~135 (1998)
- Finding the Tipping Point-When Sovereign Debt Turns Bad, "Caner, M.", World Bank, ~, pp.Policy Research Working Paper 5391 (2010)
- The Future of Public Debt:Prospects and Implications, "Cecchetti, G.", BIS, ~, pp.Working Papers No. 300 (2010)
- Checherita, C., "The impact of high government debt on economic growth and its channel: An empirical investigation for the euro area", European Economic Review, 56, pp.1392~1405 (2012)
- External Debt, Public Investment, and Growth in Low-income Countries, "Clements, B.", IMF, ~, pp.Working paper WP (2003), 03[DOI]
- Dar, A., "On the impact of public debt on economic growth", Applied Econometrics and International Development, 14(1), pp.21~32 (2014)
- Firebaugh, G., "Growth Effects of Foreign and Domestic Investment", American Journal of Sociology, 98(1), pp.105~130 (1992)
- Threshold Effects of Sovereign Debt: Evidence from the Caribbean, "Greenidge, K.", IMF, ~, pp.Working Paper WP (2012), 12[DOI]
- Hansen, L. P., "Large sample properties of generalized method of moments estimators", Econometrica, 50(4), pp.1029~1054 (1982)
- World Economic Outlook, "IMF", ~
- Woo, J., "Public Debt and Growth", Economica, 82, pp.705~739 (2015)
- Mankiw G., "A Contribution to the Empirics of Economic Growth", The Quarterly Journal of Economics, 107(2), pp.407~437 (1992)
- Makki, S., "Impact of foreign direct investment and trade on economic growth: Evidence from developing countries", American Journal of Agricultural Economics, 86(3), pp.795~801 (2004)
- Mello, L. R. Jr., "Foreign direct investment-led growth: Evidence from time series and panel data", Oxford Economic Papers, 51(1), pp.133~151 (1999)
- Mengistu, B., "Foreign direct investment, governance and economic development in developing countries", The Journal of Social, Political, and Economic Studies, 32(2), pp.223~249 (2007)
- Reinhart, C. M., "Growth in a time of debt", American Economic Review, 100(2), pp.573~578 (2010)
- Romer, P., "Idea gaps and object gaps in economic development", Journal of Monetary Economics, 32(3), pp.543~573 (1993)
- World Development Indicators, "World Bank", ~
- Zhang, K. H., "Foreign direct investment and economic growth in China: A panel data study for 1992-2004", ~ (2006)