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Table 2 Evaluation of the empirical results on the causal relationship between public debt and economic growth (REH and Keynesian approaches).

From: Triggering economic growth to ensure financial stability: case study of Northern Cyprus

Author year

Method

Country

Findings

Beyene and Kotosz (2020)

(ARDL) Granger-causality

Ethiopia

Keynesian view valid (i.e., supports non debt neutrality)

Saungweme and Odhiambo (2019)

(ARDL) Granger-causality

Zambia

Unidirectional causality from economic growth to public debt

Gómez-Puig and Sosvilla-Rivero (2018)

Granger-causality test

EU

Higher public debt → lower GDP growth rate

Matuka and Asafo (2018)

Cointegration VECM

Ghana

External debt inflows stimulate growth in both the short-run and long-run

Donayre and Taivan (2017)

VAR/Granger-causality tests

OECD (20 countries)

Public debt ↔ low real GDP growth (socialist / capitalist economies)

Owusu-Nantwi and Erickson (2016)

Time-series

Ghana

Public debt ↔ GDP growth rate

Adom (2016)

Granger-causality test

Ghana

High public debt → low growth rate

Kobayashi (2015)

Granger-causality test

Japan

High Public debt ← low real GDP growth

Panizza and Presbitero (2014)

Endogenous growth model

OECD /20 countries

No direct relationship or causality

Afzal 2012

ARCH, GARCH, GARCH, and GJR-GARCH

Evidence from Pakistan and India

REH supported

Reinhart and Rogoff (2010)

Endogenous growth model

Emerging and 44 advanced economies

No relationship or causality

Heathcote (2005)

Time series

USA

REH not supported

Giorgioni and holden (2003b)

Time series

G7

Keynesian view valid

Giorgioni and holden (2003a)

Time series

10 countries

REH valid

Marinherio

Euler eq

Portugal

REH not supported, Keynesian view valid

Elemendorf and Mankiw (1999)

The non-linearity test developed by Hansen (1999)

West African Economic and Monetary Union (WAEMU)

Keynesian valid

Wheeler (1999)

Time series

USA

REH valid

Lucke (1998)

Time series

Germany

REH valid

Barro (1979)

Unweighted regression

USA

REH supported

Ricardo (1951)

Economic modelling

REH supported