Fiscal sustainability and economic growth in the light of new economic governance
Abstract
This research estimates the effects of public debt on economic growth. In addition, it contributes to examining the impact of public debt on investment as a possible channel of impact on economic growth. The empirical analysis is based on a smooth transition panel data regression model. The results show the non-linear relationship between public debt and economic growth for the sample of 12 Euro area countries is markedly statistically significant. The sustainable threshold for this relationship is on average between 93% and 105%. This implies that public debt to gross domestic product ratios above this sustainable threshold would have a negative effect on economic growth. Although insignificant, the results for the sample of 20 Euro area countries could indicate that for the less developed Euro countries the potentially negative effects of high debt can already be seen at a lower level of public debt, which is the case for even more sensible debt reduction policies. Taking into consideration the fiscal rules, the results suggest that one size does not necessarily fit all. Moreover, the trade-off between fiscal consolidation and increased green public investment will be one of the key challenges of this decade given the reinstated European Union fiscal rules.
First published online 16 April 2025
Keyword : fiscal policy, public finance sustainability, public debt, economic growth, fiscal rules, fiscal consolidation, new economic governance
How to Cite
Južnik Rotar, L. (2025). Fiscal sustainability and economic growth in the light of new economic governance. Technological and Economic Development of Economy, 1-22. https://doi.org/10.3846/tede.2025.22499
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Abbas, Q., Junqing, L., Ramzan, M., & Fatima, S. (2021). Role of governance in debt-growth relationship: Evidence from panel data estimations. Sustainability, 13(11), Article 5954. https://doi.org/10.3390/su13115954https://doi.org/10.3390/su13115954
Afonso, A., & Alves, J. (2015). The role of government debt in economic growth. Revista Hacienda Pública Española, 215(4), 9–26.
Aguilar, P. A., Alloza, M., Costain, J., Hurtado, S., & Martínez-Martín, J. (2024). The effect of the European Central Bank’s asset purchase programmes on Spain’s public finances (Documentos Ocasionales No. 2409). Banco de España. https://doi.org/10.53479/36254
Albu, A.-C., & Albu, L.-L. (2021). Public debt and economic growth in Euro area countries. A wavelet approach. Technological and Economic Development of Economy, 27(3), 602–625. https://doi.org/10.3846/tede.2021.14241
Alesina, A., & Perotti, R. (1997). Fiscal adjustments in OECD countries: Composition and macroeconomic effects. IMF Economic Review, 44, 210–248.
Alonso, M., Arnal, J., Mesa-Toro, A., & Moreno, A. (2022). Do corruption perceptions impact the pricing and access of Euro area corporations to bond markets? The European Journal of Finance, 30(4), 370–384. https://doi.org/10.1080/1351847X.2022.2112731
Amann, J., & Middleditch, P. (2020). Revisiting Reinhart and Rogoff after the crisis: A time series perspective. Cambridge Journal of Economics, 44(2), 343–370. https://doi.org/10.1093/cje/bez009
Ash, M., Deepankar, B., & Arindrajit, D. (2017). Public debt and growth: An assessment of key findings on causality and thresholds (Working Paper No. 10). University of Massachusetts, Department of Economics, Amherst, MA.
Bank for International Settlements. (2022). Market dysfunction and central bank tools. Insights from a Markets Committee working group chaired by Andrew Hauser (Bank of England) and Lorie Logan (Federal Reserve Bank of New York) (BIS Markets Committee Papers).
Barro, R. J., & Sala-I-Martin, X. I. (2003). Economic growth (2nd ed.). MIT Press.
Baum, A., Checherita-Westphal, C., & Rother, P. (2013). Debt and growth: New evidence for the Euro area. Journal of International Money and Finance, 32, 809–821. https://doi.org/10.1016/j.jimonfin.2012.07.004
Bentour, E. M. (2021). On the public debt and growth threshold: One size does not necessarily fit all. Applied Economics, 53(11), 1280–1299. https://doi.org/10.1080/00036846.2020.1828806
Brida, J. G., Alvarez, E., Cayssials, G., & Mednik, M. (2024). How does population growth affect economic growth and vice versa? An empirical analysis. Review of Economics and Political Science, 9(3), 265–297. https://doi.org/10.1108/REPS-11-2022-0093
Butkus, M., Cibulskienė, D., Garšvienė, L., & Seputienė, J. (2021). The heterogeneous public debt –growth relationship: The role of the expenditure multiplier. Sustainability, 13(9), Article 4602. https://doi.org/10.3390/su13094602
Căpraru, B., Pappas, A., Cole, A. L., Ellina, D., Jessua, E., Lang, M., Oliinyk, I., Olabarría, E. M., Pablo, L. N., Psarinopoulos, N., Redoulès, O., & Tasoula, M. (2024). Do institutional aspects shape the effectiveness of independent fiscal institutions? The case of countries’ compliance with EU fiscal rules (Working Paper Series No. 1). EU Independent Fiscal Institutions.
Cecchetti, S. G., Mohanty, M. S., & Zampolli, F. (2010). The future of public debt: Prospects and implications. (BIS Working Paper No. 300). Bank for International Settlements. https://doi.org/10.2139/ssrn.1599421
Checherita-Westphal, C., & 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, 56(7), 1392–1405. https://doi.org/10.1016/j.euroecorev.2012.06.007
Cooray, A., & Özmen, I. (2024). The role of institutions on public debt: A quantile regression approach. International Review of Economics & Finance, 93, 912–928. https://doi.org/10.1016/j.iref.2024.03.065
de Soyres, C., Kawai, R., & Wang, M. (2022). Public debt and real GDP: Revisiting the Impact. (IMF Working Paper No. 2022/076). International Monetary Fund. https://doi.org/10.5089/9798400207082.001
Efthimiadis, T., & Tsintzos, P. (2023). From debt to green growth: A policy proposal. Sustainability, 15(4), Article 3506. https://doi.org/10.3390/su15043506
Eichacker, N. (2023). A political economy of fiscal space: Political structures, bond markets, and monetary accommodation of government spending potential in the core and periphery. Review of Political Economy, 36(2), 546–564. https://doi.org/10.1080/09538259.2023.2178843
European Commission. (2015, September 30). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Action Plan on Building a Capital Markets Union (COM/2015/0468 final). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52015DC0468
European Commission (2019, November 12). Communication from the Commission. The European green deal (COM (2019) 640 final). https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:52019DC0640
European Commission. (2020a, May 02). Economic governance review. Report on the application of Regulations (EU) No 1173/2011, 1174/2011, 1175/2011, 1176/2011, 1177/2011, 472/2013 and 473/2013 and on the suitability of Council Directive 2011/85/EU (COM (2020) 55 final). https://economy-finance.ec.europa.eu/system/files/2020-02/com_2020_55_en.pdf
European Commission. (2020b, September 24). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. A Capital Markets Union for people and businesses-new action plan (COM/2020/590 final). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2020%3A590%3AFIN
European Commission. (2023a). A Green Deal Industrial Plan for the Net-Zero Age. https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan_en
European Commission. (2023b, March 8). Communication from the commission to the council. Fiscal policy guidance for 2024 (COM (2023) 141 final). https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:52023DC0141
European Commission. (2023c). AMECO Database. Retrieved October 22, 2023, from https://economy-finance.ec.europa.eu/economic-research-and-databases/economic-databases/ameco-database_en
European Commission. (n.d.). The Recovery and Resilience Facility. https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en
European Commission. (2024). 2024 ageing report – Economic and budgetary projections for the EU Member States (2022-2070) (Institutional Paper No. 279). Publications Office of the European Union. https://doi.org/10.2765/022983
European Council. (2024). What the EU is doing to deepen its capital markets. https://www.consilium.europa.eu/en/policies/what-the-eu-is-doing-to-deepen-its-capital-markets/
European Investment Bank, Kalantzis, F., & Cimini, F. (2023). What drives firms’ investment in climate action? Evidence from the 2022–2023 EIB investment survey. https://data.europa.eu/doi/10.2867/048422
Eurostat. (2023). Eurostat Database. Retrieved October 22, 2023, from https://ec.europa.eu/eurostat/web/main/data/database
Gómez-Puig, M., & Sosvilla-Rivero, S. (2017). Heterogeneity in the debt-growth nexus: Evidence from EMU countries. International Review of Economics & Finance, 51, 470–486. https://doi.org/10.1016/j.iref.2017.07.008
Gómez-Puig, M., & Sosvilla-Rivero, S. (2024). Assessing heterogeneous time-varying impacts in the debt-growth nexus. Applied Economics, 1–19. https://doi.org/10.1080/00036846.2024.2311068
Gonzalez, A., Teräsvirta, T., & van Dijk, D. (2005). Panel smooth transition regression models (Quantitative Finance Research Centre Paper No. 165). University of Technology, Sydney.
Grennes, T., Caner, M., & Koehler-Geib, F. (2010). Finding the tipping point: When sovereign debt turns bad (Policy Research Working Paper No. WPS 5391). World Bank Group. https://doi.org/10.1596/1813-9450-5391
Heimberger, P. (2023). Do higher public debt levels reduce economic growth? Journal of Economic Surveys, 37(4), 1061–1089. https://doi.org/10.1111/joes.12536
High Level Forum on the CMU. (2020). A new vision for Europe’s capital markets – Final report of the High Level Forum on the capital markets Union. https://finance.ec.europa.eu/document/download/e3689370-b1ba-49fd-8829-646592d9464f_en?filename=200610-cmu-high-level-forum-final-report_en.pdf
International Monetary Fund. (2001). Developing government bond markets. The World Bank.
Jones, C. (2015). The facts of economic growth (Working Paper No. 21142). National Bureau of Economic Research. https://doi.org/10.3386/w21142
Kumar, M. S., & Woo, J. (2010). Public debt and growth. IMF Working Papers, 2010(174). International Monetary Fund. https://doi.org/10.5089/9781455201853.001
Law, S. H., Ng, C. H., Kutan, A. M., & Law, Z. K. (2021). Public debt and economic growth in developing countries: Nonlinearity and threshold analysis. Economic Modelling, 98, 26–40. https://doi.org/10.1016/j.econmod.2021.02.004
Lee, C. L., Ahmad, R., Karim, Z. A., & Khalid, N. (2023). Institutional quality, income level, and debt sustainability: New evidence using dynamic panel threshold regression. Technological and Economic Development of Economy, 29(5), 1520–1538. https://doi.org/10.3846/tede.2023.19247
Liu, Z., & Lyu, J. (2021). Public debt and economic growth: Threshold effect and its influence factors. Applied Economics Letters, 28(3), 208–212. https://doi.org/10.1080/13504851.2020.1740157
Liu, D., Xu, B., Song, Y., & Wang, Q. (2023). What drives China’s long-term economic growth trend? A re-measurement based on a time-varying mixed-frequency dynamic factor model. Technological and Economic Development of Economy, 29(3), 741–774. https://doi.org/10.3846/tede.2023.18705
Luukkonen, R., Saikkonen, P., & Teräsvirta, T. (1988). Testing linearity against smooth transition autoregressive models. Biometrika, 75(3), 491–499. https://doi.org/10.1093/biomet/75.3.491
Mackiewicz, M. (2023). The cyclical behaviour of fiscal policy: Are developing countries different, and do institutions matter? Technological and Economic Development of Economy, 29(3), 796–813. https://doi.org/10.3846/tede.2023.18709
Maurin, L., Minnella, E., & Lake, A. (2024). Estimating financial integration in Europe: How to separate structural trends from cyclical fluctuations. The Quarterly Review of Economics and Finance, 95, 85–97. https://doi.org/10.1016/j.qref.2024.03.005
Mencinger, J., Aristovnik, A., & Verbic, M. (2014). The impact of growing public debt on economic growth in the European Union. Amfiteatru Economic Journal, 16(35), 403–414.
Mencinger, J., Aristovnik, A., & Verbic, M. (2015). Revisiting the role of public debt in economic growth: The case of OECD countries. Engineering Economics, 26(1), 61–66. https://doi.org/10.5755/j01.ee.26.1.4551
Mensah, L., Allotey, D., Sarpong-Kumankoma, E., & Coffie, W. (2020). What debt threshold hampers economic growth in Africa? International Journal of Development Issues, 19(1), 25–42. https://doi.org/10.1108/IJDI-03-2019-0056
Miyamoto, H., Baum, A., Gueorguiev, N., Honda, J., & Walker, S. (2020). Growth impact of public investment and the role of infrastructure governance. In G. Schwartz, M. Fouad, T. S. Hansen, & G. Verdier (Eds.), Well spent: How strong infrastructure governance can end waste in public investment (pp. 15–29). IMF Press. https://doi.org/10.5089/9781513511818.071
Morina, F., Misiri, V., & Gashi, F. (2023). Long-term relationship between investment and economic growth: A cointegration analysis of OECD countries. European Journal of Government and Economics, 12(2), 175–195. https://doi.org/10.17979/ejge.2023.12.2.9909
Mu, H. (2024). Green investment, energy efficiency, and economic growth: Does economic freedom matter? Evidence from BRICS countries. Technological and Economic Development of Economy, 30(1), 218–237. https://doi.org/10.3846/tede.2024.19442
Onofrei, M., Bostan, I., Firtescu, B. N., Roman, A., & Rusu, V. D. (2022). Public debt and economic growth in EU countries. Economies, 10(10), 254–277. https://doi.org/10.3390/economies10100254
Panizza, U., & Presbitero, A. F. (2014). Public debt and economic growth: Is there a causal effect? Journal of Macroeconomics, 41, 21–41. https://doi.org/10.1016/j.jmacro.2014.03.009
Ramos-Herrera, M. del C., & Sosvilla-Rivero, S. (2023). Granger causality between public debt and economic growth: Further evidence from panel data. Applied Economics Letters, 1–6. https://doi.org/10.1080/13504851.2023.2274300
Reinhart, C. M., & Rogoff, K. S. (2010). Growth in a time of debt. American Economic Review, 100(2), 573–578. https://doi.org/10.1257/aer.100.2.573
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), 71–102. https://doi.org/10.1086/261725
Shah, S. S. A., Dickinson, D., Tao, K., Wang, C., & Zhang, L. (2025). The heterogenous threshold effects of public debt on economic growth: Empirical evidence from developing countries. Open Economies Review, 36, 243–280. https://doi.org/10.1007/s11079-024-09756-7
Turan, T., & Iyidogan, P. V. (2023). Non-linear impacts of public debt on growth, investment and credit: A dynamic panel threshold approach. Prague Economic Papers, 32(2), 107–128. https://doi.org/10.18267/j.pep.825
van Dijk, D., Teräsvirta, T., & Franses, P. H. (2002). Smooth transition autoregressive models. A survey of recent developments. Econometric Reviews, 21(1), 1–47. https://doi.org/10.1081/ETC-120002918
Véron, N. (2024). Capital markets union: Ten years later. Economic Governance and EMU scrutiny Unit. https://www.europarl.europa.eu/RegData/etudes/IDAN/2024/747839/IPOL_IDA(2024)747839_EN.pdf
Wolff, G. B., & Darvas, Z. (2022). How to reconcile increased green public investment needs with fiscal consolidation (CEPR VoxEU Column). Centre for Economic Policy Research.
Woo, J., & Kumar, M. S. (2015). Public debt and growth. Economica, 82(328), 705–739. https://doi.org/10.1111/ecca.12138
Afonso, A., & Alves, J. (2015). The role of government debt in economic growth. Revista Hacienda Pública Española, 215(4), 9–26.
Aguilar, P. A., Alloza, M., Costain, J., Hurtado, S., & Martínez-Martín, J. (2024). The effect of the European Central Bank’s asset purchase programmes on Spain’s public finances (Documentos Ocasionales No. 2409). Banco de España. https://doi.org/10.53479/36254
Albu, A.-C., & Albu, L.-L. (2021). Public debt and economic growth in Euro area countries. A wavelet approach. Technological and Economic Development of Economy, 27(3), 602–625. https://doi.org/10.3846/tede.2021.14241
Alesina, A., & Perotti, R. (1997). Fiscal adjustments in OECD countries: Composition and macroeconomic effects. IMF Economic Review, 44, 210–248.
Alonso, M., Arnal, J., Mesa-Toro, A., & Moreno, A. (2022). Do corruption perceptions impact the pricing and access of Euro area corporations to bond markets? The European Journal of Finance, 30(4), 370–384. https://doi.org/10.1080/1351847X.2022.2112731
Amann, J., & Middleditch, P. (2020). Revisiting Reinhart and Rogoff after the crisis: A time series perspective. Cambridge Journal of Economics, 44(2), 343–370. https://doi.org/10.1093/cje/bez009
Ash, M., Deepankar, B., & Arindrajit, D. (2017). Public debt and growth: An assessment of key findings on causality and thresholds (Working Paper No. 10). University of Massachusetts, Department of Economics, Amherst, MA.
Bank for International Settlements. (2022). Market dysfunction and central bank tools. Insights from a Markets Committee working group chaired by Andrew Hauser (Bank of England) and Lorie Logan (Federal Reserve Bank of New York) (BIS Markets Committee Papers).
Barro, R. J., & Sala-I-Martin, X. I. (2003). Economic growth (2nd ed.). MIT Press.
Baum, A., Checherita-Westphal, C., & Rother, P. (2013). Debt and growth: New evidence for the Euro area. Journal of International Money and Finance, 32, 809–821. https://doi.org/10.1016/j.jimonfin.2012.07.004
Bentour, E. M. (2021). On the public debt and growth threshold: One size does not necessarily fit all. Applied Economics, 53(11), 1280–1299. https://doi.org/10.1080/00036846.2020.1828806
Brida, J. G., Alvarez, E., Cayssials, G., & Mednik, M. (2024). How does population growth affect economic growth and vice versa? An empirical analysis. Review of Economics and Political Science, 9(3), 265–297. https://doi.org/10.1108/REPS-11-2022-0093
Butkus, M., Cibulskienė, D., Garšvienė, L., & Seputienė, J. (2021). The heterogeneous public debt –growth relationship: The role of the expenditure multiplier. Sustainability, 13(9), Article 4602. https://doi.org/10.3390/su13094602
Căpraru, B., Pappas, A., Cole, A. L., Ellina, D., Jessua, E., Lang, M., Oliinyk, I., Olabarría, E. M., Pablo, L. N., Psarinopoulos, N., Redoulès, O., & Tasoula, M. (2024). Do institutional aspects shape the effectiveness of independent fiscal institutions? The case of countries’ compliance with EU fiscal rules (Working Paper Series No. 1). EU Independent Fiscal Institutions.
Cecchetti, S. G., Mohanty, M. S., & Zampolli, F. (2010). The future of public debt: Prospects and implications. (BIS Working Paper No. 300). Bank for International Settlements. https://doi.org/10.2139/ssrn.1599421
Checherita-Westphal, C., & 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, 56(7), 1392–1405. https://doi.org/10.1016/j.euroecorev.2012.06.007
Cooray, A., & Özmen, I. (2024). The role of institutions on public debt: A quantile regression approach. International Review of Economics & Finance, 93, 912–928. https://doi.org/10.1016/j.iref.2024.03.065
de Soyres, C., Kawai, R., & Wang, M. (2022). Public debt and real GDP: Revisiting the Impact. (IMF Working Paper No. 2022/076). International Monetary Fund. https://doi.org/10.5089/9798400207082.001
Efthimiadis, T., & Tsintzos, P. (2023). From debt to green growth: A policy proposal. Sustainability, 15(4), Article 3506. https://doi.org/10.3390/su15043506
Eichacker, N. (2023). A political economy of fiscal space: Political structures, bond markets, and monetary accommodation of government spending potential in the core and periphery. Review of Political Economy, 36(2), 546–564. https://doi.org/10.1080/09538259.2023.2178843
European Commission. (2015, September 30). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Action Plan on Building a Capital Markets Union (COM/2015/0468 final). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52015DC0468
European Commission (2019, November 12). Communication from the Commission. The European green deal (COM (2019) 640 final). https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:52019DC0640
European Commission. (2020a, May 02). Economic governance review. Report on the application of Regulations (EU) No 1173/2011, 1174/2011, 1175/2011, 1176/2011, 1177/2011, 472/2013 and 473/2013 and on the suitability of Council Directive 2011/85/EU (COM (2020) 55 final). https://economy-finance.ec.europa.eu/system/files/2020-02/com_2020_55_en.pdf
European Commission. (2020b, September 24). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. A Capital Markets Union for people and businesses-new action plan (COM/2020/590 final). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2020%3A590%3AFIN
European Commission. (2023a). A Green Deal Industrial Plan for the Net-Zero Age. https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan_en
European Commission. (2023b, March 8). Communication from the commission to the council. Fiscal policy guidance for 2024 (COM (2023) 141 final). https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:52023DC0141
European Commission. (2023c). AMECO Database. Retrieved October 22, 2023, from https://economy-finance.ec.europa.eu/economic-research-and-databases/economic-databases/ameco-database_en
European Commission. (n.d.). The Recovery and Resilience Facility. https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en
European Commission. (2024). 2024 ageing report – Economic and budgetary projections for the EU Member States (2022-2070) (Institutional Paper No. 279). Publications Office of the European Union. https://doi.org/10.2765/022983
European Council. (2024). What the EU is doing to deepen its capital markets. https://www.consilium.europa.eu/en/policies/what-the-eu-is-doing-to-deepen-its-capital-markets/
European Investment Bank, Kalantzis, F., & Cimini, F. (2023). What drives firms’ investment in climate action? Evidence from the 2022–2023 EIB investment survey. https://data.europa.eu/doi/10.2867/048422
Eurostat. (2023). Eurostat Database. Retrieved October 22, 2023, from https://ec.europa.eu/eurostat/web/main/data/database
Gómez-Puig, M., & Sosvilla-Rivero, S. (2017). Heterogeneity in the debt-growth nexus: Evidence from EMU countries. International Review of Economics & Finance, 51, 470–486. https://doi.org/10.1016/j.iref.2017.07.008
Gómez-Puig, M., & Sosvilla-Rivero, S. (2024). Assessing heterogeneous time-varying impacts in the debt-growth nexus. Applied Economics, 1–19. https://doi.org/10.1080/00036846.2024.2311068
Gonzalez, A., Teräsvirta, T., & van Dijk, D. (2005). Panel smooth transition regression models (Quantitative Finance Research Centre Paper No. 165). University of Technology, Sydney.
Grennes, T., Caner, M., & Koehler-Geib, F. (2010). Finding the tipping point: When sovereign debt turns bad (Policy Research Working Paper No. WPS 5391). World Bank Group. https://doi.org/10.1596/1813-9450-5391
Heimberger, P. (2023). Do higher public debt levels reduce economic growth? Journal of Economic Surveys, 37(4), 1061–1089. https://doi.org/10.1111/joes.12536
High Level Forum on the CMU. (2020). A new vision for Europe’s capital markets – Final report of the High Level Forum on the capital markets Union. https://finance.ec.europa.eu/document/download/e3689370-b1ba-49fd-8829-646592d9464f_en?filename=200610-cmu-high-level-forum-final-report_en.pdf
International Monetary Fund. (2001). Developing government bond markets. The World Bank.
Jones, C. (2015). The facts of economic growth (Working Paper No. 21142). National Bureau of Economic Research. https://doi.org/10.3386/w21142
Kumar, M. S., & Woo, J. (2010). Public debt and growth. IMF Working Papers, 2010(174). International Monetary Fund. https://doi.org/10.5089/9781455201853.001
Law, S. H., Ng, C. H., Kutan, A. M., & Law, Z. K. (2021). Public debt and economic growth in developing countries: Nonlinearity and threshold analysis. Economic Modelling, 98, 26–40. https://doi.org/10.1016/j.econmod.2021.02.004
Lee, C. L., Ahmad, R., Karim, Z. A., & Khalid, N. (2023). Institutional quality, income level, and debt sustainability: New evidence using dynamic panel threshold regression. Technological and Economic Development of Economy, 29(5), 1520–1538. https://doi.org/10.3846/tede.2023.19247
Liu, Z., & Lyu, J. (2021). Public debt and economic growth: Threshold effect and its influence factors. Applied Economics Letters, 28(3), 208–212. https://doi.org/10.1080/13504851.2020.1740157
Liu, D., Xu, B., Song, Y., & Wang, Q. (2023). What drives China’s long-term economic growth trend? A re-measurement based on a time-varying mixed-frequency dynamic factor model. Technological and Economic Development of Economy, 29(3), 741–774. https://doi.org/10.3846/tede.2023.18705
Luukkonen, R., Saikkonen, P., & Teräsvirta, T. (1988). Testing linearity against smooth transition autoregressive models. Biometrika, 75(3), 491–499. https://doi.org/10.1093/biomet/75.3.491
Mackiewicz, M. (2023). The cyclical behaviour of fiscal policy: Are developing countries different, and do institutions matter? Technological and Economic Development of Economy, 29(3), 796–813. https://doi.org/10.3846/tede.2023.18709
Maurin, L., Minnella, E., & Lake, A. (2024). Estimating financial integration in Europe: How to separate structural trends from cyclical fluctuations. The Quarterly Review of Economics and Finance, 95, 85–97. https://doi.org/10.1016/j.qref.2024.03.005
Mencinger, J., Aristovnik, A., & Verbic, M. (2014). The impact of growing public debt on economic growth in the European Union. Amfiteatru Economic Journal, 16(35), 403–414.
Mencinger, J., Aristovnik, A., & Verbic, M. (2015). Revisiting the role of public debt in economic growth: The case of OECD countries. Engineering Economics, 26(1), 61–66. https://doi.org/10.5755/j01.ee.26.1.4551
Mensah, L., Allotey, D., Sarpong-Kumankoma, E., & Coffie, W. (2020). What debt threshold hampers economic growth in Africa? International Journal of Development Issues, 19(1), 25–42. https://doi.org/10.1108/IJDI-03-2019-0056
Miyamoto, H., Baum, A., Gueorguiev, N., Honda, J., & Walker, S. (2020). Growth impact of public investment and the role of infrastructure governance. In G. Schwartz, M. Fouad, T. S. Hansen, & G. Verdier (Eds.), Well spent: How strong infrastructure governance can end waste in public investment (pp. 15–29). IMF Press. https://doi.org/10.5089/9781513511818.071
Morina, F., Misiri, V., & Gashi, F. (2023). Long-term relationship between investment and economic growth: A cointegration analysis of OECD countries. European Journal of Government and Economics, 12(2), 175–195. https://doi.org/10.17979/ejge.2023.12.2.9909
Mu, H. (2024). Green investment, energy efficiency, and economic growth: Does economic freedom matter? Evidence from BRICS countries. Technological and Economic Development of Economy, 30(1), 218–237. https://doi.org/10.3846/tede.2024.19442
Onofrei, M., Bostan, I., Firtescu, B. N., Roman, A., & Rusu, V. D. (2022). Public debt and economic growth in EU countries. Economies, 10(10), 254–277. https://doi.org/10.3390/economies10100254
Panizza, U., & Presbitero, A. F. (2014). Public debt and economic growth: Is there a causal effect? Journal of Macroeconomics, 41, 21–41. https://doi.org/10.1016/j.jmacro.2014.03.009
Ramos-Herrera, M. del C., & Sosvilla-Rivero, S. (2023). Granger causality between public debt and economic growth: Further evidence from panel data. Applied Economics Letters, 1–6. https://doi.org/10.1080/13504851.2023.2274300
Reinhart, C. M., & Rogoff, K. S. (2010). Growth in a time of debt. American Economic Review, 100(2), 573–578. https://doi.org/10.1257/aer.100.2.573
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), 71–102. https://doi.org/10.1086/261725
Shah, S. S. A., Dickinson, D., Tao, K., Wang, C., & Zhang, L. (2025). The heterogenous threshold effects of public debt on economic growth: Empirical evidence from developing countries. Open Economies Review, 36, 243–280. https://doi.org/10.1007/s11079-024-09756-7
Turan, T., & Iyidogan, P. V. (2023). Non-linear impacts of public debt on growth, investment and credit: A dynamic panel threshold approach. Prague Economic Papers, 32(2), 107–128. https://doi.org/10.18267/j.pep.825
van Dijk, D., Teräsvirta, T., & Franses, P. H. (2002). Smooth transition autoregressive models. A survey of recent developments. Econometric Reviews, 21(1), 1–47. https://doi.org/10.1081/ETC-120002918
Véron, N. (2024). Capital markets union: Ten years later. Economic Governance and EMU scrutiny Unit. https://www.europarl.europa.eu/RegData/etudes/IDAN/2024/747839/IPOL_IDA(2024)747839_EN.pdf
Wolff, G. B., & Darvas, Z. (2022). How to reconcile increased green public investment needs with fiscal consolidation (CEPR VoxEU Column). Centre for Economic Policy Research.
Woo, J., & Kumar, M. S. (2015). Public debt and growth. Economica, 82(328), 705–739. https://doi.org/10.1111/ecca.12138