On the Debt-Growth Relationship and Related GMM Issues

Name: On the Debt-Growth Relationship and Related GMM Issues
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2024 - 3

Title

On the Debt-Growth Relationship and Related GMM Issues

Author

Gianni Carvelli

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

11-2024

Doi

10.26350/000518_000136

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

Ebook format Pdf readable on these devices:

Computer
with Software:
- Adobe PDF Reader
Android
iPhone/Ipad
with App:
- Adobe PDF Reader
E-Book Reader
Ibs Tolino
Kobo

Appendix

Description

This article examines the effects of public debt on aggregate growth and some of its main channels utilising a larger dataset than those employed in most pre-COVID studies. We build a conditionalconvergence framework by performing a panel analysis that accommodates the autoregressive behaviour of the response variable. We discuss the difference-GMM and system-GMM techniques, focusing on critical issues inherent to such methods within the context of the debt-growth analyses, especially as concerns the internal instrument proliferation that typically arises when T is large. The estimates suggest that public debt adversely affects aggregate growth, productivity and capital accumulation, especially over the five-year horizon. However, the marked differences between advanced and emerging economies, along with crucial methodological issues typically associated with GMM approaches in macroeconomic frameworks, prompt crucial questions about the reliability of such techniques in analysing the debt-growth nexus and in generalising the resulting findings and policy recommendations.