relationship between government debt and economic growth (Kumar and Woo 2010; Reinhart and Rogoff 2010a, 2010b; Checherita and Rother, 2010; Cecchetti et al., 2011; Clements et al., 2003 etc.). In order to analyze the economic impact of public debt on economic growth, we have considered data from 2005-2016. This paper examines the impact of government debt on economic growth in Namibia with annual data spanning from 1980 to 2016. In this regard, the GITD findings are clearly out of step with academic research on government borrowing and economic growth. In particular, the United States economy has only exceeded the 90% threshold in six of … 7, pp. The theoretical lit-erature focused on the negative relationship between the public debt to GDP ratio and GDP per capita growth rate (Saint-Paul 1992; Aizenman et al. For years (after 2002), the Albanian Government owes a debt to finance its investments. Governments borrow to cover budget deficits. This paper investigates the average impact of government debt on per-capita GDP growth in twelve euro area countries over a period of about 40 years starting in 1970. According to (Umaru, Hamidu, and Musa 2013) external debt possess a negative impact on economic growth while domestic debt has a positive impact on economic growth (GDP). Keywords: government debt, economic growth, debt thresholds. It finds a non-linear impact of debt on growth with a turning point—beyond which the government debt-to-GDP ratio has a deleterious impact on long-term growth—at about 90-100% of GDP. Checherita-Westphal, C. and Rother, P. (2012), “ The impact of high government debt on economic growth and its channels: an empirical investigation for the euro area ”, European Economic Review, Vol. Alternatively, the observed correlation between debt and growth could be due to a third factor that has a joint effect on these two variables. The persistent increase of government debt in Malaysia in the recent years has raised con-cerns as to whether the borrowings have spurred the economy or became a drag on econom-ic growth. The debt is obtained either from the domestic market or from iii DEDICATION I dedicate this thesis to my spouse Githuku, … large negative effects on growth. The research is based on data obtained from 1980 to 2007 on external debt, private investment, foreign direct investment (FDI), gross domestic product (GDP) and In addition, we … For example, an influential series of papers by Reinhart and Rogoff (2010, 2012) argues that there is a threshold effect whereby debt above 90 percent of GDP is associated with dramatically worse growth outcomes. While Alesina and Ardagna (2010) focused on providing empirical evidence for a short-term positive impact on economic activity from spending cuts, the threshold argument was fuelled primarily by the study of Reinhardt and Rogoff (2010) . These two arguments animated empirical attempts to find a negative impact of high deficits or debt on capital formation and economic growth. 56 No. THE IMPACT OF HIGH AND GROWING GOVERNMENT DEBT ON ECONOMIC GROWTH AN EMPIRICAL INVESTIGATION FOR THE EURO AREA 1 by Cristina … Similarly, the IMF study found that debt thresholds for advanced economies ranged from 60 per cent to 80 per cent but … Specially, it is expected that public debt has a positive impact on economic growth under control of corruption. literature reviewed on government debt indicated that there was an impact of government debt on economic growth; some showed a positive economic growth while others showed a negative economic growth. The study reveals that the impact of government debt on economic growth over the period under review is insignificant – with external debt which has been enormous over the years contributing minimally to real gross domestic product. WORKING PAPER SERIES NO 1237 / AUGUST 2010 In 2010 all ECB publications feature a motif taken from the €500 banknote. We employ an Autoregressive Distribution Lag (ARDL) model that serves as an analysis of the short and long run link between public debt and economic growth. The study finds that across both advanced and emerging economies, high debt-to-GDP levels (90 percent and greater) are associated … Government … Government debt by Greece proved to be bad for the economy while government debt by USA which has the highest debt in the world proved to be manageable. Downloadable! Downloadable! The study examined the impact of government debt on economic growth through extensive review of relevant theoretical and empirical literature. The survey finds diverse and, in some cases, inconsistent evidence on the relative impact of public debt on economic growth. This led to the need to examine the impact of government debt on economic growth in Kenya. 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