{
  "title": "This Time They Are Different: Heterogeneity and Nonlinearity in the Relationship Between Debt and Growth",
  "publication": "IMF Working Papers, December 17, 2013",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/this-time-they-are-different-heterogeneity-and-nonlinearity-in-the-relationship-between-debt-41142",
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  "summary": "We study the long-run relationship between public debt and growth in a large panel of countries. Our analysis takes particular note of theoretical arguments and data considerations in modeling the debt-growth relationship as heterogeneous across countries.",
  "sections": [
    {
      "heading": "Study objective and methodological approach",
      "content": "- Objective: Study the long-run relationship between public debt and growth in a large panel of countries.\n- Analytical emphasis:\n  - Take particular note of theoretical arguments and data considerations in modeling the debt–growth relationship as heterogeneous across countries.\n  - Investigate nonlinearities (debt thresholds) in both the cross-country and within-country dimensions.\n  - Employ novel methods and diagnostics from the time-series literature adapted for use in the panel.\n- Keywords and technical terms used in the analysis: asymmetric ARDL, common factor model, debt coefficient, GDP ratio, linear regression, nonlinearity."
    },
    {
      "heading": "Key findings",
      "content": "- There is some support for a nonlinear relationship between debt and long-run growth across countries.\n- There is no evidence for common debt thresholds within countries over time.\n- Emphasis on heterogeneity: the debt–growth relationship should be modeled as heterogeneous across countries rather than assumed homogeneous."
    },
    {
      "heading": "Analytical implications (from the paper’s results)",
      "content": "- Cross-country analyses: nonlinearities (debt thresholds) can be present across countries, implying that average or pooled estimates may mask important nonlinearity across different country contexts.\n- Within-country analyses: absence of common debt thresholds over time suggests that a single universal threshold applicable to every country-period is not supported by the evidence presented.\n\n---\n\n Content in this bundle\n\n- wp13248\n  - wp13248 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp13248 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/this-time-they-are-different-heterogeneity-and-nonlinearity-in-the-relationship-between-debt-41142"
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    "Authors: Markus Eberhardt, Andrea F Presbitero",
    "Published: December 17, 2013",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484309285.001",
    "Objective: Study the long-run relationship between public debt and growth in a large panel of countries.",
    "Analytical emphasis:",
    "Keywords and technical terms used in the analysis: asymmetric ARDL, common factor model, debt coefficient, GDP ratio, linear regression, nonlinearity.",
    "There is some support for a nonlinear relationship between debt and long-run growth across countries.",
    "There is no evidence for common debt thresholds within countries over time.",
    "Emphasis on heterogeneity: the debt–growth relationship should be modeled as heterogeneous across countries rather than assumed homogeneous.",
    "Cross-country analyses: nonlinearities (debt thresholds) can be present across countries, implying that average or pooled estimates may mask important nonlinearity across different country contexts.",
    "Within-country analyses: absence of common debt thresholds over time suggests that a single universal threshold applicable to every country-period is not supported by the evidence presented.",
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