Debt and Growth Is There a Magic Threshold? |
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Author:
| Pescatori, Andrea Sandri, Damiano Simon, John |
Series title: | IMF Working Papers |
ISBN: | 978-1-4843-0648-2 |
Publication Date: | Feb 2014 |
Publisher: | International Monetary Fund
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Book Format: | Ebook |
List Price: | USD $9.00 |
Book Description:
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Using a novel empirical approach and an extensive dataset developed by the Fiscal Affairs Department of the IMF, we find no evidence of any particular debt threshold above which medium-term growth prospects are dramatically compromised. Furthermore, we find the debt trajectory can be as important as the debt level in understanding future growth prospects, since countries with high but declining debt appear to grow equally as fast as countries with lower debt. Notwithstanding this, we...
More DescriptionUsing a novel empirical approach and an extensive dataset developed by the Fiscal Affairs Department of the IMF, we find no evidence of any particular debt threshold above which medium-term growth prospects are dramatically compromised. Furthermore, we find the debt trajectory can be as important as the debt level in understanding future growth prospects, since countries with high but declining debt appear to grow equally as fast as countries with lower debt. Notwithstanding this, we find some evidence that higher debt is associated with a higher degree of output volatility.