Document Type
Article
Abstract
We examine the effect of public debt on private investment in selected emerging economies. Using a panel threshold regression model, we estimate a threshold value of about 3 percent, on average, below which public debt stimulates private investment. Our additional analysis involving selected developed economies suggests that the crowding out effect is less evident relative to the emerging economies as higher public debt stocks do not seem to significantly undermine their private investments. These results have implications for debt sustainability and maintaining a reasonable public debt–GDP ratio is crucial for sustainable investment growth.
Recommended Citation
Penzin, Dinci J.; Salisu, Afees; and Akanegbu, Benedict N.
(2022)
"A NOTE ON PUBLIC DEBT-PRIVATE INVESTMENT NEXUS IN EMERGING ECONOMIES,"
Bulletin of Monetary Economics and Banking: Vol. 25:
No.
1, Article 9.
DOI: https://doi.org/10.21098/bemp.v25i1.1988
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol25/iss1/9
First Page
25
Last Page
36
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Indonesia
Affiliation
Nile University
