Table 1. Empirical studies on the causal... | Emerald Publishing

Table 1.

Empirical studies on the causal relationship between public debt and economic growth

Author(s)	Title	Country/region	Methodology	Model variables	Direction of causality
Saungweme and Odhiambo (2019)	Government debt, government debt service and economic growth nexus in Zambia: a multivariate analysis	Zambia	•Dynamic multivariate autoregressive-distributed lag (ARDL) • Granger-causality tests	• Fiscal balance • Savings as intermittent variables	Unidirectional Granger-causality from economic growth to public debt
Matuka and Asafo (2018)	External debt and economic growth in Ghana: A Co-integration and vector error correction analysis	Ghana	•Johansen co-integration • Vector error correction	• External debt to GDP •Total debt service to export ratio • Gross capital formation to GDP • FDI to GDP • Growth rate of export capacity to import • Oil rent to GDP	External debt inflows stimulate growth both in the short-run and long-run
Donayre and Taivan (2017)	Causality between public debt and real growth in the OECD: A country-by-country analysis	20 OECD countries	• VAR tests • Granger-causality tests	• Growth rate of real GDP • Debt-to-GDP ratio • Trade-to-GDP ratio • Capital	Public debt ← low real GDP growth (capitalist economies)
Donayre and Taivan (2017)	Causality between public debt and real growth in the OECD: A country-by-country analysis	20 OECD countries	• VAR tests • Granger-causality tests	• Growth rate of real GDP • Debt-to-GDP ratio • Trade-to-GDP ratio • Capital	Public debt ↔ low real GDP growth (socialist economies)
Owusu-Nantwi and Erickson (2016)	Public debt and economic growth in Ghana	Ghana	• Time-series •Johansen co-integration Analysis	• GDP growth rate • Public debt • Trade openness • Inflation • Population growth • Investment spending	Public debt ↔ GDP growth rate
Adom (2016)	The DDT effect: the case of economic growth, public debt and democracy relationship	Ghana	• Granger-causality test	• Public debt/GDP ratio • Economic openness • Population growth • Trend GDP per capita growth • Gross investment • Regime durability	High public debt → low growth rate
Kobayashi (2015)	Public debt overhang and economic growth	Japan	• Simulations • Granger-causality test	• Public debt • Real GDP growth • Fiscal balance	Public debt ← low real GDP growth
Gómez-Puig and Sosvilla-Rivero (2015)	On the bi-directional causal relationship between public debt and economic growth in EMU countries	European Economic and Monetary Union countries	• Granger-causality test	• Government debt-to-GDP ratio • Rate of GDP growth	High public debt → low GDP growth rate
Panizza and Presbitero (2014)	Public debt and economic growth: Is there a causal effect?	20 OECD countries	• Endogenous growth model • Instrumental variable approach	• Public debt/GDP ratio • Real GDP per capita growth • National gross savings • Liquid liabilities/GDP • Inflation rate • Dependency ratio • Population growth • Trade openness • Schooling • Banking crisis	No causality
Reinhart and Rogoff (2010)	Debt and growth revisited	44 advanced and emerging countries	• Endogenous growth model • Instrumental variable approach	• Fiscal deficits • Government debt • Sovereign credit ratings • GDP • Inflation	No causality

Author(s)	Title	Country/region	Methodology	Model variables	Direction of causality
Saungweme and Odhiambo (2019)	Government debt, government debt service and economic growth nexus in Zambia: a multivariate analysis	Zambia	•Dynamic multivariate autoregressive-distributed lag (ARDL)• Granger-causality tests	• Fiscal balance• Savings as intermittent variables	Unidirectional Granger-causality from economic growth to public debt
Matuka and Asafo (2018)	External debt and economic growth in Ghana: A Co-integration and vector error correction analysis	Ghana	•Johansen co-integration• Vector error correction	• External debt to GDP•Total debt service to export ratio• Gross capital formation to GDP• FDI to GDP• Growth rate of export capacity to import• Oil rent to GDP	External debt inflows stimulate growth both in the short-run and long-run
Donayre and Taivan (2017)	Causality between public debt and real growth in the OECD: A country-by-country analysis	20 OECD countries	• VAR tests• Granger-causality tests	• Growth rate of real GDP• Debt-to-GDP ratio• Trade-to-GDP ratio• Capital	Public debt ← low real GDP growth(capitalist economies)
Donayre and Taivan (2017)	Causality between public debt and real growth in the OECD: A country-by-country analysis	20 OECD countries	• VAR tests• Granger-causality tests	• Growth rate of real GDP• Debt-to-GDP ratio• Trade-to-GDP ratio• Capital	Public debt ↔ low real GDP growth(socialist economies)
Owusu-Nantwi and Erickson (2016)	Public debt and economic growth in Ghana	Ghana	• Time-series•Johansen co-integrationAnalysis	• GDP growth rate• Public debt• Trade openness• Inflation• Population growth• Investment spending	Public debt ↔ GDP growth rate
Adom (2016)	The DDT effect: the case of economic growth, public debt and democracy relationship	Ghana	• Granger-causality test	• Public debt/GDP ratio• Economic openness• Population growth• Trend GDP per capita growth• Gross investment• Regime durability	High public debt → low growth rate
Kobayashi (2015)	Public debt overhang and economic growth	Japan	• Simulations• Granger-causality test	• Public debt• Real GDP growth• Fiscal balance	Public debt ← low real GDP growth
Gómez-Puig and Sosvilla-Rivero (2015)	On the bi-directional causal relationship between public debt and economic growth in EMU countries	European Economic and Monetary Union countries	• Granger-causality test	• Government debt-to-GDP ratio• Rate of GDP growth	High public debt → low GDP growth rate
Panizza and Presbitero (2014)	Public debt and economic growth: Is there a causal effect?	20 OECD countries	• Endogenous growth model• Instrumental variable approach	• Public debt/GDP ratio• Real GDP per capita growth• National gross savings• Liquid liabilities/GDP• Inflation rate• Dependency ratio• Population growth• Trade openness• Schooling• Banking crisis	No causality
Reinhart and Rogoff (2010)	Debt and growth revisited	44 advanced and emerging countries	• Endogenous growth model• Instrumental variable approach	• Fiscal deficits• Government debt• Sovereign credit ratings• GDP• Inflation	No causality