Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries

Irfan Alam

doi:doi:10.11648/j.ijsts.20190705.11

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Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries

Irfan Alam

Received: 18 April 2019 Accepted: 27 July 2019 Published: 25 November 2019

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Abstract

The aim of this study is to investigate the relationship between debt threshold and GDP per capita growth by using Panel Threshold Regression. The sample of the study is G7 (Advanced Countries) from the period of 1995 to 2015. The results suggested that the scale of debt threshold is ambiguous in this study because debt threshold has not significant effect on GDP per capita growth at the threshold level of 62.47%. The magnitude of debt effect is not same on below and above threshold level. If debt is below and above from 62.47%, its significant positive effect on GDP growth at 0.70% and 0.47% respectively. Also, explanatory variables are used in the study include inflation, trade to GDP, gross saving to GNI, government final consumption expenditure and total investment to GDP. There is a mix result of explanatory variables in the study as inflation and trade to GDP have positive effect on GDP per capita growth but does not produce significant result while gross saving and total investment to GDP have significant positive effect on GDP growth. At last, government final consumption expenditure has significant negative effect on GDP growth.

DOI	10.11648/j.ijsts.20190705.11
Published in	International Journal of Science, Technology and Society (Volume 7, Issue 5, September 2019)
Page(s)	74-77
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

GDP Per Capita Growth, Public Debt, Threshold Effect, Panel Threshold Regression, G7 (Advance Countries)

References

[1]	R. C. Okeke and A. N. Idike, "Public Debt and Sustainable National Development in Nigeria: Analysis of Fundamental Issues," International Letters of Social and Humanistic Sciences, vol. 74, pp. 41-47, 2016.
[2]	M. Ismihan and F. G. Ozkanb, "Public debt and financial development: A theoretical exploration," Economics Letters, vol. 115, pp. 348-351, 2012.
[3]	A. Tešić, D. Ilić and A. T. Đelic, "CONSEQUENCES OF FISCAL DEFICIT AND PUBLIC DEBT IN FINANCING THE PUBLIC SECTOR," Economics of Agriculture, vol. 61, no. 1, pp. 177-194, 2014.
[4]	A. Schclarek, "Debt and Economic Growth in Developing and Industrial Countries," 2004.
[5]	C. M. Reinhart and K. S. Rogoff, "Growth in a Time of Debt," American Economic Review, vol. 100, pp. 573-578, 2010.
[6]	M. Lof and T. Malinen, "Does sovereign debt weaken economic growth? A panel VAR analysis," Economics Letters, vol. 112, pp. 403-407, 2014.
[7]	M. S. Kumar and J. Woo, "PUBLIC DEBT AND GROWTH," 2015.
[8]	M. Eberhardt and A. F. Presbitero, "Public debt and growth: Heterogeneity and non-linearity," Journal of International Economics, vol. 97, pp. 45-58, 2015.
[9]	D. W. Elmendorf and N. G. Mankiw, "Government Debt," Handbook of Macroeconomics, vol. 1, no. 3, pp. 1615-1669, 1999.
[10]	E. Baldacci and M. Kumar, "Fiscal Deficit, Public Debt, and Sovereign Bonds Yields," IMF Working Papers 10, p. 184, 2010.
[11]	B. E. Hansen, "Threshold e!ects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, vol. 93, pp. 345-368, 1999.

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Irfan Alam. (2019). Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries. International Journal of Science, Technology and Society, 7(5), 74-77. https://doi.org/10.11648/j.ijsts.20190705.11

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ACS Style

Irfan Alam. Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries. Int. J. Sci. Technol. Soc. 2019, 7(5), 74-77. doi: 10.11648/j.ijsts.20190705.11

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AMA Style

Irfan Alam. Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries. Int J Sci Technol Soc. 2019;7(5):74-77. doi: 10.11648/j.ijsts.20190705.11

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@article{10.11648/j.ijsts.20190705.11,
  author = {Irfan Alam},
  title = {Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries},
  journal = {International Journal of Science, Technology and Society},
  volume = {7},
  number = {5},
  pages = {74-77},
  doi = {10.11648/j.ijsts.20190705.11},
  url = {https://doi.org/10.11648/j.ijsts.20190705.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijsts.20190705.11},
  abstract = {The aim of this study is to investigate the relationship between debt threshold and GDP per capita growth by using Panel Threshold Regression. The sample of the study is G7 (Advanced Countries) from the period of 1995 to 2015. The results suggested that the scale of debt threshold is ambiguous in this study because debt threshold has not significant effect on GDP per capita growth at the threshold level of 62.47%. The magnitude of debt effect is not same on below and above threshold level. If debt is below and above from 62.47%, its significant positive effect on GDP growth at 0.70% and 0.47% respectively. Also, explanatory variables are used in the study include inflation, trade to GDP, gross saving to GNI, government final consumption expenditure and total investment to GDP. There is a mix result of explanatory variables in the study as inflation and trade to GDP have positive effect on GDP per capita growth but does not produce significant result while gross saving and total investment to GDP have significant positive effect on GDP growth. At last, government final consumption expenditure has significant negative effect on GDP growth.},
 year = {2019}
}

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TY  - JOUR
T1  - Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries
AU  - Irfan Alam
Y1  - 2019/11/25
PY  - 2019
N1  - https://doi.org/10.11648/j.ijsts.20190705.11
DO  - 10.11648/j.ijsts.20190705.11
T2  - International Journal of Science, Technology and Society
JF  - International Journal of Science, Technology and Society
JO  - International Journal of Science, Technology and Society
SP  - 74
EP  - 77
PB  - Science Publishing Group
SN  - 2330-7420
UR  - https://doi.org/10.11648/j.ijsts.20190705.11
AB  - The aim of this study is to investigate the relationship between debt threshold and GDP per capita growth by using Panel Threshold Regression. The sample of the study is G7 (Advanced Countries) from the period of 1995 to 2015. The results suggested that the scale of debt threshold is ambiguous in this study because debt threshold has not significant effect on GDP per capita growth at the threshold level of 62.47%. The magnitude of debt effect is not same on below and above threshold level. If debt is below and above from 62.47%, its significant positive effect on GDP growth at 0.70% and 0.47% respectively. Also, explanatory variables are used in the study include inflation, trade to GDP, gross saving to GNI, government final consumption expenditure and total investment to GDP. There is a mix result of explanatory variables in the study as inflation and trade to GDP have positive effect on GDP per capita growth but does not produce significant result while gross saving and total investment to GDP have significant positive effect on GDP growth. At last, government final consumption expenditure has significant negative effect on GDP growth.
VL  - 7
IS  - 5
ER  -

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Author Information

Irfan Alam

Department of Management Sciences, Ghulam Ishaq Khan Institute of Engineering Sciences and Technology, Topi, Pakistan

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Plain Text BibTeX RIS

APA Style

Irfan Alam. (2019). Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries. International Journal of Science, Technology and Society, 7(5), 74-77. https://doi.org/10.11648/j.ijsts.20190705.11

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ACS Style

Irfan Alam. Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries. Int. J. Sci. Technol. Soc. 2019, 7(5), 74-77. doi: 10.11648/j.ijsts.20190705.11

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AMA Style

Irfan Alam. Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries. Int J Sci Technol Soc. 2019;7(5):74-77. doi: 10.11648/j.ijsts.20190705.11

Copy | Download

@article{10.11648/j.ijsts.20190705.11,
  author = {Irfan Alam},
  title = {Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries},
  journal = {International Journal of Science, Technology and Society},
  volume = {7},
  number = {5},
  pages = {74-77},
  doi = {10.11648/j.ijsts.20190705.11},
  url = {https://doi.org/10.11648/j.ijsts.20190705.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijsts.20190705.11},
  abstract = {The aim of this study is to investigate the relationship between debt threshold and GDP per capita growth by using Panel Threshold Regression. The sample of the study is G7 (Advanced Countries) from the period of 1995 to 2015. The results suggested that the scale of debt threshold is ambiguous in this study because debt threshold has not significant effect on GDP per capita growth at the threshold level of 62.47%. The magnitude of debt effect is not same on below and above threshold level. If debt is below and above from 62.47%, its significant positive effect on GDP growth at 0.70% and 0.47% respectively. Also, explanatory variables are used in the study include inflation, trade to GDP, gross saving to GNI, government final consumption expenditure and total investment to GDP. There is a mix result of explanatory variables in the study as inflation and trade to GDP have positive effect on GDP per capita growth but does not produce significant result while gross saving and total investment to GDP have significant positive effect on GDP growth. At last, government final consumption expenditure has significant negative effect on GDP growth.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries
AU  - Irfan Alam
Y1  - 2019/11/25
PY  - 2019
N1  - https://doi.org/10.11648/j.ijsts.20190705.11
DO  - 10.11648/j.ijsts.20190705.11
T2  - International Journal of Science, Technology and Society
JF  - International Journal of Science, Technology and Society
JO  - International Journal of Science, Technology and Society
SP  - 74
EP  - 77
PB  - Science Publishing Group
SN  - 2330-7420
UR  - https://doi.org/10.11648/j.ijsts.20190705.11
AB  - The aim of this study is to investigate the relationship between debt threshold and GDP per capita growth by using Panel Threshold Regression. The sample of the study is G7 (Advanced Countries) from the period of 1995 to 2015. The results suggested that the scale of debt threshold is ambiguous in this study because debt threshold has not significant effect on GDP per capita growth at the threshold level of 62.47%. The magnitude of debt effect is not same on below and above threshold level. If debt is below and above from 62.47%, its significant positive effect on GDP growth at 0.70% and 0.47% respectively. Also, explanatory variables are used in the study include inflation, trade to GDP, gross saving to GNI, government final consumption expenditure and total investment to GDP. There is a mix result of explanatory variables in the study as inflation and trade to GDP have positive effect on GDP per capita growth but does not produce significant result while gross saving and total investment to GDP have significant positive effect on GDP growth. At last, government final consumption expenditure has significant negative effect on GDP growth.
VL  - 7
IS  - 5
ER  -

Copy | Download