Public debt in developing Asia: a help or hindrance to growth?

ABSTRACT

We study the effects of public debt on economic growth using a panel of 25 Asian countries from 1970 to 2015. Using a collection of panel data models, we find weak evidence in favour of a negative relationship. Our estimates imply that a 10% increase in debt predicts declines in growth rates ranging from 0.2% to 0.4%.

KEYWORDS:

• Developing Asia
• public debt
• economic growth
• panel data

JEL CLASSIFICATION:

• O11
• O47
• H63

Disclosure statement

No potential conflict of interest was reported by the authors.