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This paper explores the impact of high public debt on long-run economic growth. Paper Pages: English Publication Date: Economic growth Gross domestic product Labor productivity Low-income developing countries Public debt. In addition, threshold effects, nonlinearities, and differences between advanced and emerging market economies are examined.
Jaejoon Woo ; Manmohan S. Login or Register Information of interest. Kumar Publication Date: Analysis of the components of growth suggests that the adverse effect largely reflects a slowdown in labor productivity growth mainly due to reduced investment and slower growth of capital stock.
The empirical results suggest an inverse relationship between initial debt and subsequent growth, controlling for other determinants of growth: Working Papers describe research in progress by the author s and are published to elicit comments and to further debate.
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July 1, 2010 Electronic Access: There is some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth.
The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity.