PhD Seminar (Econ)
Date & time
Increasing government spending doesn’t grow the economy, at least in the short term, but rather debt growth hinders economic growth. Many studies that applied the threshold models show that the debt has a negative effect when the debt is above the threshold level. However, this study argues that the increase in government debt is negatively correlated with the growth rate regardless of the level of debt and inflation, based on data since 2000. And the estimates of the FE panel threshold and dynamic panel threshold models indicate that the negative effect of debt growth is higher in the upper regime.