The impact of public debt on economic growth: Evidence from advanced economies and the European Union
The impact of public debt on economic growth: Evidence from advanced economies and the European Union

Summary/Abstract: This paper investigates the relationship between public debt and economic growth in selected advanced economies and European Union member states over the period 2000-2022. Using a linear panel regression model, the study analyzes the impact of public debt on GDP growth, while accounting for additional macroeconomic factors such as inflation, unemployment, and gross fixed capital formation. The findings reveal a negative linear relationship between public debt and economic growth, with the effect being more pronounced in EU countries due to their economic integration. While public debt is shown to hinder long-term growth, the analysis acknowledges the possibility of short-term positive effects under specific conditions. These results underscore the importance of tailored fiscal policies and sustainable debt management strategies for fostering economic stability.

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