European Parliament Library

Debt and Growth :, Is There a Magic Threshold?, Andrea Pescatori, Damiano Sandri, John Simon

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 find some evidence that higher debt is associated with a higher degree of output volatility
Table Of Contents
Cover; Contents; I. Introduction; II. Literature Review and Background; III. Data and Methodology; IV. Empirical Results; Figures; 1. Debt and Growth in the Short Run; 2. Debt and Growth over the Medium Run; 3. Debt Dynamics over the Medium Term; V. Robustness Checks; 4. Debt and Growth Depend on the Debt Trajectory; 5. Relative Growth Performance; VI. Debt and Volatility; 6. Growth Performance from 5 to 15 Years after Crossing Debt Thresholds; VII. Conclusions; 7. GDP Volatility during the 15 Years after Crossing Debt Thresholds; VIII. Data Appendix; References
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (20 p.)
Specific Material Designation
Form Of Item

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