Public Debt and Economic Growth nexus in Latin America: A Retrospective Appraisal

ILEANA RAQUEL JALILE

Paradigma Económico

Universidad Autónoma del Estado de México

Lugar: México; Año: 2023 vol. 15

2594-1348

n this paper, we examine the effect of public debt on Gross Domestic Product (GDP) in 15 Latin American economies for fifty years. The short-run impact of debt on GDP growth is positive, but it is closer to zero beyond public debt-to-GDP ratios between 64 and 71% (i.e. up to this threshold, additional debt has a stimulating impact on growth). In the long-run, the threshold is between 95% and 97%.