







































 
 

 

39 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

Economy 
Vol. 10, No. 1, 39-49, 2023 

ISSN(E) 2313-8181/ ISSN(P) 2518-0118 
DOI: 10.20448/economy.v10i1.5274 

© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 
 

 
 
 
Does public debt disrupt economic growth in Nigeria? A two-stage least squares 
approach 

 
Innocent Uchechukwu Duru1  

Okorontah, Chikeziem Fortunatus2   

Iyaji Danjuma3   

Chukwuemeka Nwamuo4   

Uzoma Kelechi Promise5   

Ojo Toluwalashe Favour6   

 

 
( Corresponding Author) 

 
1,2,4,5Department of Economics, Rhema University Nigeria, Aba, Abia State, Nigeria . 
1Email: iud3x@yahoo.com  
2Email: chizim4teens@yahoo.com  
4Email: mekuzy2002@yahoo.com  
5Email: uzksboy@gmail.com  
3Department of Economics, Nigerian Army University, Biu, Borno State, Nigeria. 
3Email: danjumaiyaji@gmail.com  
6Ado-Ekiti State University, Ekiti State, Nigeria. 
6Email: ojotoluwalashe1995@gmail.com  

 
Abstract 

The impact of Nigeria's public debt on economic growth was investigated in this study. 
Additionally, it confirmed the validity of Nigeria's debt burden and crowding-out hypotheses. The 
time series data used ranged from 1981 to 2021. For analysis, the Two-Stage Least Squares and 
Toda Yamamoto Causality tests were employed. The findings contradicted the debt overhang effect 
hypothesis by showing that public debt had a positive and significant influence on economic growth. 
This proves that Nigeria's public debt has no adverse effects on the economic growth of the nation. 
Additionally, debt service has a detrimental effect on economic growth. This demonstrated that the 
crowding-out effect, often known as the crowding-out hypothesis, existed in Nigeria. Thus, 
servicing the national debt has a negative impact on Nigeria's economic expansion. The results of 
the public debt model, however, showed that trade openness and real gross domestic product had a 
favourable effect on public debt. A bidirectional relationship between public debt and economic 
growth was revealed by the findings of the causality test. The results also showed a one-way 
relationship between debt service and economic growth. As a result, the study implies that the 
government can simultaneously pursue its two policy goals of economic growth and public debt. 
Furthermore, decisions about debt repayment in Nigeria should be made in a way that promotes 
the growth of the economy. Nigeria should also improve institutional performance and boost its 
macroeconomic policy in the areas of inflation, foreign direct investment, trade, and exchange rates. 

 
Keywords: 2SLS, Crowding out hypothesis, Debt overhang hypothesis, Economic growth, Nigeria, Public debt, Simultaneous equation model, 
Toda Yamamoto causality. 
JEL Classification: O11; H63; O40; C22. 
 
Citation | Duru, I. U., Fortunatus, O. C., Danjuma, I., Nwamuo, C., 
Promise, U. K., & Favour, O. T. (2023). Does public debt disrupt 
economic growth in Nigeria? A two-stage least squares 
approach. Economy, 10(1), 39–49. 10.20448/economy.v10i1.5274 
History:  
Received: 10 October 2023 
Revised: 5 December 2023 
Accepted: 20 December 2023 
Published: 29 December 2023  
Licensed: This work is licensed under a Creative Commons 

Attribution 4.0 License  
Publisher: Asian Online Journal Publishing Group  
 

Funding: This study received no specific financial support.    
Institutional Review Board Statement: Not applicable. 
Transparency: The authors confirm that the manuscript is an honest, accurate, 
and transparent account of the study; that no vital features of the study have 
been omitted; and that any discrepancies from the study as planned have been 
explained. This study followed all ethical practices during writing. 
Data Availability Statement: The corresponding author may provide study 
data upon reasonable request. 
Competing Interests: The authors declare that they have no competing 
interests. 
Authors’ Contributions: All authors contributed equally to the conception and 
design of the study. All authors have read and agreed to the published version 
of the manuscript. 

 
 

 

mailto:iud3x@yahoo.com
mailto:chizim4teens@yahoo.com
mailto:mekuzy2002@yahoo.com
mailto:uzksboy@gmail.com
mailto:danjumaiyaji@gmail.com
mailto:ojotoluwalashe1995@gmail.com
https://creativecommons.org/licenses/by/4.0/
https://creativecommons.org/licenses/by/4.0/
https://www.doi.org/10.20448/economy.v10i1.5274
https://orcid.org/0000-0001-8958-0686
https://orcid.org/0009-0006-9305-3233
https://orcid.org/0000-0002-0275-6608
https://orcid.org/0000-0002-0304-4100
https://orcid.org/0009-0003-7218-323X


Economy, 2023, 10(1): 39-49 

40 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

Contents 
1. Introduction ................................................................................................................................................................................................... 40 
2. Literature Review and Theoretical Framework ................................................................................................................................. 41 
3. Methodology and Model Specification .................................................................................................................................................. 44 
4. Data Presentation, Analysis and Discussion of Results ................................................................................................................... 45 

5. Conclusion and Recommendations ......................................................................................................................................................... 47 
References ........................................................................................................................................................................................................... 47 
 

Contribution of this paper to the literature 
In contrast to previous studies, this study deployed the 2SLS technique to untangle the nexus 
between total public debt and economic growth in Nigeria from 1981 to 2021. The study also 
utilized the 2SLS to address endogeneity, regarded as a methodological improvement, a majo 
divergence from several past studies.    

 
1. Introduction 

The debate on the relationship between public debt and economic growth among academics, policymakers and 
economics in the economic literature has lasted for ages. Evidence from the existing literature on the public debt-
growth nexus indicates that the laggard economies particularly have been at the receiving end because of  its impact 
on their Gross Domestic Product (GDP) growth rates through interest rates, saving, investment and total factor 
productivity. However, Checherita-Westphal and Rother (2011) maintained that longstanding interest rates are the 
main conduit through which the negative consequences of  public debt accumulation on growth are experienced. 
Public debt is regarded by economists as a critical problem that inhibits economic performance. No wonder Chongo 
(2013) stressed that it was a two-edged sword after an investigation of  its consequences on the economy of  Zambia.  

Owing to its unfavourable consequences on the performance of  the economy, the widespread accumulation of  
public debt over time all over the world economy has become amazing. The issue of  the buildup of  public debt 
predominantly in low- and middle-income economies over time and its unfavourable consequences on the 
performance of  these economies has further aroused the collective interests of  some economists and policymakers. 
Public debt is a possible catalyst for financing budget deficits in less developed countries (Geleta, 2021). A surge has 
been recorded in internal and foreign debts owing to the need of  the government to finance the deficit budget. On 
the other hand, the interest in the public debt-growth nexus in advanced economies among economists, policymakers, 
and scholars was strengthened by the Great Recession of  2008–09 and the substantial fiscal stimulus measures 
applied by governments (Sabina, 2018). For instance, in the view of  the European Commission (2017), throughout 
the 2008–2009 global financial and economic crisis, the fiscal sustainability of  innumerable European economies was 
severely dampened. 

This reinforced Canbek (2014) contention that the level of  public debt at the time was a subject of  political 
discussion for both established and developing nations. Moreover, Canbek (2014) stressed that after the 2008 global 
financial crisis, the connection between public debt and growth was at the vanguard of  macroeconomics literature. 
Atoullo (2019) claimed that before the Great Recession of  2008, the body of  research was merely focused on a 
particular cluster of  rising economic powers and undeveloped countries that had meaningful external indebtedness. 
In the contention of  Leon, Murillo, and Hernandez (2019), public debt surfaced as one of  the major dynamics 
influencing economic growth after the financial crisis of  2008. The debt-growth nexus in established countries was 
unearthed by Reinhart and Rogoff  (2010a); Reinhart and Rogoff  (2010b); Reinhart and Rogoff  (2011) and Reinhart, 
Reinhart, and Rogoff  (2012). These narratives engendered a new series of  discussions concerning the connection 
between debt and the fundamental health of  the economy. Reinhart and Rogoff  (2010a) investigated whether public 
debt began to cause contraction below a specific threshold.  

Owing to the finding of  Reinhart and Rogoff  (2010a) that economic growth is significantly dampened if  the 
public debt-to-GDP ratio approaches 90%, the research that has been executed to investigate the public debt-growth 
nexus in advanced countries and developing markets has increased. The political officeholders and decision-makers 
in Nigeria could borrow a leaf  from the outcome of  this investigation in the formulation of  strategies for handling 
the debt crisis in Nigeria. Also, it would underpin the creation of  an enabling environment for inclusive sustainable 
economic growth by getting rid of  the challenges Nigeria has due to its debt problem. Moreover, the outcome of  
this investigation could be critical to decision-makers in the design of  a new Nigerian public debt management 
strategy. 

While a considerable body of  past investigation on the subject proposes a negative connection between public 
debt and economic growth (Abbas & Christensen, 2010; Ahlborn & Schweickert, 2016; Akram, 2015, 2016; Al Kharusi 
& Ada, 2018; Clements, Bhattacharya, & Nguyen, 2003; Egert, 2015; Gomez-Puig & Sosvilla-Rivero, 2018; Hansen, 
2002; Huang, Panizza, & Varghese, 2018; Kumar & Woo, 2010; Mhlaba & Phiri, 2019; Panizza & Presbitero, 2014; 
Reinhart & Rogoff, 2010a; Reinhart & Rogoff, 2010b; Sachs, 1989; Schclarek, 2004; Serieux & Yiagadeesen, 2001; 
Szabo, 2013; Weeks, 2000; Woo & Kumar, 2015), two conflicting viewpoints still subsist.  

Based on the first contention (Abbas & Christensen, 2010; Adams & Bevan, 2005; Bua, Pradelli, & Presbitero, 
2014; Gomez-Puig & Sosvilla-Rivero, 2018; Greiner, 2011; Owusu-Nantwi & Erickson, 2016; Sanchez-Juarez & 
Garcia-Almada, 2016; Spilioti & Vamvoukas, 2015), public debt has a positive effect on economic growth. The second 
contention is that public debt has no effects on economic growth (Adams & Bevan, 2005; Akram, 2015, 2016; Hansen, 
2001; Jalles, 2011; Kourtellos, Stengos, & Tan, 2013; Panizza & Presbitero, 2012; Pattillo, Poirson, & Ricci, 2002; 
Schclarek, 2004; Tchereni, Sekhamptu, & Ndovi, 2013). Finally, a nonlinear connection between public debt and 
economic growth is reinforced by certain studies (Baum, Checherita-Westphal, & Rother, 2013; Checherita-Westphal 
& Rother, 2010, 2011; Eberhardt & Presbitero, 2015; Minea & Parent, 2012; Mupunga & Le Roux, 2015; Pattillo et 
al., 2002; Pescatori, Sandri, & Simon, 2014; Reinhart & Rogoff, 2010a). 

The empirical research on the causal relationship between public debt and economic growth is still in its early 
years, and the findings are conflicting. Evidence from the existing empirical data points to changes that originated 
from time and cross-country divergence. In certain investigation, the connection between public debt and economic 



Economy, 2023, 10(1): 39-49 

41 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

growth was unidirectional (Afxentiou, 1993; Donayre & Taivan, 2017; Gomez-Puig & Sosvilla-Rivero, 2015; 
Kobayashi, 2015; Woo & Kumar, 2015), whereas, in other studies, the connection was found to be bidirectional (Abbas 
& Christensen, 2010; Amoateng & Amoako-Adu, 1996; Donayre & Taivan, 2017; Eberhardt & Presbitero, 2015; 
Ferreira, 2009; Owusu-Nantwi & Erickson, 2016). However, certain investigations discerned no connection between 
public debt and economic growth (Donayre & Taivan, 2017; Gomez-Puig & Sosvilla-Rivero, 2015; Jalles, 2011; 
Panizza & Presbitero, 2014; Reinhart & Rogoff, 2010a).  

Despite efforts to lower its debt in 2005, which led to the Paris Club of  Creditors granting her debt relief, Nigeria 
has continued to have trouble managing the servicing of  its comparatively huge inventories of  public debt. Nigeria's 
thirst for increasingly expensive and unaffordable international loans has led to an increase in debt. It is extremely 
important to look into how Nigeria's government debt and economic growth are related. The study seeks to provide 
answers to the following questions: Is Nigeria's government debt a barrier to the country's economy? What is the 
relationship between Nigeria's economic growth and its governmental debt? Do the debt overhang and crowding-
out hypotheses apply to Nigeria? In light of  the foregoing, this study will empirically examine the effect of  public 
debt on economic growth in Nigeria and will also ascertain the existence of  public debt overhang and crowding out 
effect on economic growth in Nigeria. 

The remainder of  the study is organized as follows: In Section 2, the relevant theoretical and empirical literature 
are reviewed. In light of  the literature review, Section 3 explains the data source, methodology, and model 
development. Section four of  the study discusses the empirical findings. The findings are used to draw the conclusions 
and policy recommendations in Section 5. 

 

2. Literature Review and Theoretical Framework 
2.1. Empirical Literature 

In-depth research has been done in the literature on the relationship between governmental debt and economic 
growth. Both developed and developing countries have examined the connections between these two variables. 
Depending on the country, different scholarly works using various types of  data and models produce different 
outcomes. The same technique alone does not guarantee the same results (Geleta, 2021). For instance, in Zimbabwe, 
Mavhinga (2015) used the Vector Error Correction Model (VECM) to examine the impact of  external debt on 
economic growth from 1980 to 2013. Also, the viability of  the debt overhang and crowding out theories in Zimbabwe 
was investigated. The results showed that external debt exerted a negative effect on economic growth.  In addition, 
the findings validated the debt overhang idea. However, the results refuted the crowding out theory in Zimbabwe. 

Wangmo (2018) investigated the association between government debt and economic growth in Bhutan from 
1990 to 2016 using the VECM methodology. The results showed the long-term positive impact of  government debt 
and tourism revenue on economic growth. However, unemployment, tax income, foreign aid, and population 
expansion had a detrimental impact on economic growth. The study examined how each component was impacted 
by the rupee currency problem as well as how it affected economic expansion. The results showed that Bhutan's 
economic growth was significantly impacted by the financial crisis of  2012. 

Iitula (2018) examined the impact of  public debt on Namibia's economic growth from 2003 to 2016 using 
information from a quarterly time series. The Toda-Yamamoto Granger causality methodology was employed for 
the analysis. The results of  cointegration showed that there are no long-term correlations between the variables. 
The results also revealed no connection between public debt and GDP growth. The results of  the variance 
decomposition test showed that the burden of  domestic debt on GDP growth was greater. The results of  the impulse 
response function show that there was instability in GDP growth's response to public debt. 

For 17 Organization for Economic Cooperation and Development (OECD) nations, Sabina (2018) looked into the 
potential nonlinearity in the relationship between public debt as a share of  GDP and economic growth for each 
country independently from 1970 to 2014. Employing the technique of  Hansen (1996) and Hansen (1999), the 
consequent debt-value threshold is endogenously determined while simultaneously adjusting for additional growth 
drivers. The results show that the debt-value thresholds, cointegration, and nonlinearity between these two variables, 
as well as the effect of  the public debt ratio on economic growth, are all country-specific. 

Using the Error Correction Model (ECM) methodology, Elikana (2019) examined the impact of  Tanzania's 
public debt on economic growth from 1990 to 2017. The findings showed that external debt positively impacted 
economic growth. However, the repayment of  external debt had a positive and insignificant impact on economic 
growth. The findings also showed that domestic debt has a negative impact on economic growth. The outcome of  
cointegration also demonstrated a long-term link between the variables. 

Sanusi, Hassan, and Meyer (2019) used a Non-linear Autoregressive Distributed Lag (NARDL) model within a 
panel framework to investigate the non-linear impacts of  public debt on economic growth in the Southern African 
Development Community (SADC). The findings supported the long-term non-linearity between public debt and 
economic growth, which suggests that public debt drives growth before counteracting it upon reaching the threshold 
level. Additionally, the findings indicate that over the long term, the SADC's public debt ceiling is set at 57% of  GDP. 

In Latin America, Leon et al. (2019) applied the Vector Autoregression technique to investigate the relationship 
between public debt and economic growth. The main results indicated that when the ratio of  public debt to GDP is 
75%, economic growth decelerates.  Conversely, the volatility of  economic growth is enhanced when the ratio is 35%. 
The results further established that external shocks such as foreign capital flows and changes in the situations of  
trade affect the link between public debt and economic growth. Rising levels of  public debt undeniably increases the 
short-run vulnerability of  the economy. However, growth becomes a catalyst for fiscal sustainability in the long term. 

The Autoregressive Distributed Lag (ARDL) model was utilized by Atoullo (2019) to examine the impact of  
public debt on Tajikistan’s economy. The short-run and long-run results showed that external debt has a detrimental 
effect on economic growth. The proposition that public debt is favourable in the short term and unfavourable in the 
long term was countered by this finding. However, it supported the suggestion that the link between public debt and 
economic growth in the short and long runs was negative. Furthermore, the impact of  debt service on economic 
growth in the short and long runs was inverse.   

Njoroge (2020) used the methodologies of  ARDL and VECM to investigate the impact of  public debt on 
economic growth in Kenya. The findings indicated that public debt, investment and population growth had a positive 



Economy, 2023, 10(1): 39-49 

42 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

effect on economic growth. On the other hand, the openness of  the economy and government consumption spending 
exerted a negative impact on economic growth. The findings further indicated that the primary budget balance had 
a positive effect on the public debt of  Kenya. This result implies that the public debt of  Kenya is manageable. 

Utilizing data from 1970-2017, Saungweme (2020) deployed the ARDL bounds tests to cointegration to analyse 
the link among public debt, public debt service and economic growth in South Africa, Zambia and Zimbabwe. The 
findings demonstrated that public debt had a favourable impact on the economic growth of  Zambia. Nonetheless, it 
exerted a negative effect on the economic growths of  South Africa and Zimbabwe respectively. Furthermore, 
domestic public debt exerted a negative effect on the economic growths of  Zambia and Zimbabwe. It, however, 
exerted a positive impact on the economic growth of  South Africa. Moreover, foreign public debt affected Zambia's 
economic growth positively. Nevertheless, it exerted a negative effect on the economic growth of  South Africa and 
Zimbabwe. The results of  the causality test indicated that causality runs from economic growth to public debt in all 
the economies investigated. In all the countries studied, there was no proof  of  a positive relationship between public 
debt service and economic growth. 

In another study, Nwanedo (2021) adopted the multiple regression technique and the Granger causality test to 
examine the impact of  public debt on economic growth in Nigeria from 1981 to 2019. The results indicated that 
external debt had a negative effect on economic growth. However, domestic debt had a positive and insignificant 
impact on economic growth. The result of  cointegration indicated the presence of  a long-run equilibrium 
relationship among the variables. The test of  the Granger causality indicated a unidirectional relationship from 
external debt and domestic debt to economic growth. 

In a study of  18 sub-Saharan African (SSA) countries, Geleta (2021) employed panel data from 2005 to 2018 and 
the Two-step System Generalized Method of  Moment (2SSYS-GMM) and Two-stage Least Squares approach.to 
examine the impact of  public debt on economic growth. The findings indicated that public debt had a negative effect 
on the economic growth of  the investigated sub-Saharan African (SSA) countries. Nevertheless, the non-linear link 
suggested by the Laffer curve between public debt and economic growth was refuted by the outcome of  this 
investigation. Moreover, the results indicated that national savings, gross exports and broad money had a positive 
effect on economic growth. Furthermore, the results indicated that there is no nexus between public debt and 
economic growth in the SSA economies investigated. 

Mosikari and Eita (2021) deployed the NARDL approach in a diverse study to explore the asymmetric link 
between government debt and GDP growth in Namibia. To begin with, the results indicated that government debt 
exerted a positive and insignificant effect on economic growth. However, government debt started to exert a negative 
influence on economic growth after a particular stage. Owing to this, GDP growth has diverse responses to rising 
debt levels and falling debt levels. The response of  the growth rate of  GDP to declining values of  debt is more 
favourable than to rising values of  debt. 

In 14 European countries of  Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, 
Norway, Portugal, Spain, Sweden, and Turkey, Yildirim and Erdogan (2021) used the panel ARDL approach to 
examine the nexus between public debt and economic growth from 1980 to 2017. The results indicated that except 
Denmark and Norway where public debt exerted a positive effect on economic growth, that it had a negative effect 
on the economic growth of  the remaining countries. However, public debt exerted a positive and insignificant effect 
on the economic growth of  Sweden. Adopting the ARDL methodology and time series data from 1980 to 2022, 
Uzoma, Duru, Uruakpa, and Nzeribe (2023) investigated the connection between public debt and economic growth 
in Nigeria. The results revealed that domestic debt had a negative effect on economic growth. However, external debt 
exerted a negative and insignificant effect on economic growth. 

Facts from the reviewed literature indicate that most of  the studies were executed in industrialized economies. 
Also, it revealed that diverse methodologies have been deployed for the investigation of  public debt-growth nexus. 
However, the VECM was the most common one in terms of  frequency of  use. There is a consensus among scholars 
that the Keynesian theory, Ricardian equivalence theory, and neoclassical theory have been utilized as the main 
theoretical framework for the investigation of  the public debt-growth nexus (Aero & Ogundipe, 2016; Eze & Ogiji, 
2016; Lwanga & Mawejje, 2014; Njoroge, 2020; Renjith & Shanmugam, 2018). To the best of  our knowledge, further 
evidence from the reviewed literature showed that Egbetunde (2012); Akomolafe, Bosede, Emmanuel, and Mark 
(2015); Nwanedo (2021) and Uzoma et al. (2023) were the investigation executed in Nigeria. 

The studies executed in Nigeria on public debt and public debt-growth nexus were sparse. Nevertheless, this 
issue had resulted in extensive studies in other developing and developed economies as evidenced by these researches 
(Alves, 2014; Atoullo, 2019; Canbek, 2014; Chongo, 2013; Geleta, 2021; Leon et al., 2019; Mosikari & Eita, 2021; 
Njoroge, 2020; Saungweme, 2020; Soares, 2022; Yildirim & Erdogan, 2021). Akomolafe et al. (2015) dwelt on public 
debt and private investment in Nigeria. To the best of  our knowledge, the only researchers their focal point was 
public debt-growth. nexus were Egbetunde (2012); Nwanedo (2021) and Uzoma et al. (2023).  

Deploying a Vector Autoregressive (VAR) technique, Egbetunde (2012) utilized time series data from 1970 to 
2010 to analyse the impact of  public debt on economic growth in Nigeria. The real gross domestic product (GDP) 
was the dependent variable. Conversely, domestic debt and external debt were the independent variables. This study 
established a bidirectional relationship between public debt and economic growth. Uzoma et al. (2023) deployed time 
series data from 1980 to 2022 to examine the link between public debt and economic growth in Nigeria. The ARDL 
approach was used for analysis. The real GDP was the dependent variable. However, domestic debt, external debt, 
inflation rate, and interest rate were the independent variables. The results indicated that domestic debt had a negative 
and significant impact on economic growth. On the other hand, external debt had a negative and insignificant effect 
on economic growth in Nigeria. 

Nwanedo (2021) on the other hand, used time series data from 1981 to 2019 and a multiple regression 
methodology to examine the connection between public debt and economic growth in Nigeria. The real GDP was 
the dependent variable. Conversely, the exchange rate, the consumer price index, the total stock of  domestic debt, 
and the total stock of  external debt were the independent variables. The findings indicated that external debt exerted 
a negative impact on economic growth. However, domestic debt exerted a positive and insignificant impact on 
economic growth. The results of  the reviewed empirical studies on public debt-growth nexus were conflicting owing 



Economy, 2023, 10(1): 39-49 

43 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

to diverse datasets and methodologies. The results of  studies executed in Nigeria (Egbetunde, 2012; Nwanedo, 2021; 
Uzoma et al., 2023) on the public debt-growth nexus were no exceptions.  

Owing to this, the public debt-growth nexus is still open for discussion in Nigeria. Methodological problems are 
among the drawbacks of  previous studies. The Ordinary Least Squares (OLS) approach was utilized by Nwanedo 
(2021) for analysis. This could probably result in a problem of  endogeneity due to the bidirectional link between 
public debt and economic growth. The resulting outcome would be biased and inconsistent in this regard owing to 
the OLS application. This study deployed the Two Stage Least Square (2SLS) approach which is at variance with the 
approaches adopted by Egbetunde (2012); Nwanedo (2021) and Uzoma et al. (2023) to analyse the public debt-growth 
nexus. In contrast to the OLS method, the 2SLS has an added advantage since it removes the endogeneity amid the 
explanatory variables. 

Moreover, the investigations by Egbetunde (2012); Nwanedo (2021) and Uzoma et al. (2023) decomposed public 
debt into domestic and external public debt. The joint effect of  total public debt (involving both domestic and 
external debt) on economic growth regarded as a critical gap in the public debt-growth literature was ignored by 
these studies as well. Owing to this, the effect of  total public debt on economic growth in Nigeria was not investigated 
by any of  these studies. No wonder Elikana (2019) maintained that evaluations of  public debt in developing 
economies have traditionally dwelt on external debt only. Based on this, we joined domestic and external debt to 
spawn total public debt rather than separating it to examine the impact of  total public debt (either domestic debt or 
external debt) on Nigeria’s economic growth. In contrast to previous studies, our study expanded the sphere of  
investigation. This study included extra macroeconomic variables into the current empirical models to address one 
of  the critical gaps in past research.  
 

2.2. Theoretical Framework 
According to the theoretical analysis of  the connection between public debt and economic growth, there is not 

just one explanation for it. The theoretical framework of  this study will therefore be based on the Neoclassical theory, 
the Keynesian theory and the Ricardian Equivalence theory. This is because, according to the literature, these are the 
main ideas that scholars employ to explain how public debt and economic growth are related. In addition to these 
three fundamental theories, others can be used to analyze the connection between debt and economic growth, 
including the functional finance theory, dual gap theory, and tax smoothening theory (Chongo, 2013; Karazijiene, 
2015). The Classical strategy, which is based on the core idea that there is no basis for government interference in 
the economy outside of  a few crucial sectors like military, health, and education, is elaborated upon by the Neo-
Classical approach. 

When it comes to public debt, these two perspective-sharing approaches underline the detrimental effect of  
government expenditure on economic growth. According to the traditional view, society or future generations are 
ultimately responsible for repaying public debt, which includes both principal and interest (Buchanan, 1958). This is 
because the neoclassical model suggests that public debt may be a constraint on economic growth because it crowds 
out private investment, according to Diamond (1965) and Panizza and Presbitero (2013). Also, this is because the 
neoclassical model gave a stronger role to crowding-out effects brought on by rising interest rates due to increased 
competition for funds in the financial markets. According to classical theory, public debt has a detrimental effect on 
economic expansion. This supports the claims made by early classical scholars like Adam Smith, Jean Baptiste Say, 
and David Ricardo, who opposed government debt because it distorts private capital and has a detrimental effect on 
capital accumulation and growth because government spending is unproductive (Tsoulfidis, 2007).  

The neoclassical supports the idea that debt held by the government impedes economic growth. Investors may 
view governmental debt as a pretext for future tax increases, interest rate rises, or debt-driven crises, all of  which 
could discourage private investment and economic growth. The crowding-out effect of  high debt levels is the term 
used to describe this phenomenon (Akram, 2015). When foreign exchange resources are mostly used for debt service 
and only a small percentage is allocated to investment and growth finance, this phenomenon is known as crowding 
out (Krugman, 1988). The crowding-out hypothesis is part of  a broader body of  neoclassical theory, which maintains 
that investment is driven away by deficit financing, leading to a decrease in capital formation and economic growth. 
Elmendorf  and Mankiw (1999) assert that the signing of  government debt to finance the budget deficit is one of  
the primary factors impeding private investment.  

Therefore, the enormous servicing of  public debt may lead to the misallocation of  limited resources that could 
be used for public investment. Therefore, the majority of  the detrimental impact of  public debt servicing on economic 
growth is explained by the crowding out hypothesis. Another widely acknowledged theory is the debt overhang 
effect. The debt overhang effect is a theory that explains how public debt influences investment and economic 
expansion. Borensztein (1989) and Sachs (1989) define a debt overhang as a situation in which a country's ability to 
repay its public debt is less than the burden of  public debt. The ratio of  public debt to GDP is used to determine 
financial capacity. A high percentage suggests that a country's ability to generate enough income to pay off  its 
national debt would be challenging. The accumulated debt stock deters investors from making investments in the 
private sector because they fear having to pay high taxes to the government (Wangmo, 2018).  

At that moment, the debt overhang effect starts to work. A country's public debt is considered to be overhanging 
when it is beyond its repayment capacity. Debt overhang can send organizations and nations into a vicious downward 
spiral since more cash flows and revenues are utilized to service current debt, which only helps to raise the total 
amount of  debt (Mensah, 2017). The negative impact of  public debt on economic growth can be largely explained 
by the debt overhang hypothesis. The idea contends that governmental debt and economic growth are inversely 
correlated. Myers proposed the debt overhang theory in Myers (1977). However, the debt crisis in the mid-1980s 
prompted several important studies by Sachs (1989); Krugman (1988) and Krugman (1989), which brought it into 
the realm of  international finance literature. Debt drives away the private sector, depletes resources due to debt and 
interest payments to borrowers, and throws doubt on the future health of  the economy, according to this prognosis. 

The Keynesian theory of  public debt contends that rising debt levels encourage government expenditure, which 
in turn boosts economic growth. The Keynesian hypothesis holds that boosting government spending by taking on 
additional debt from the public sector will increase economic activity at home and attract private investment  
(Saungweme & Odhiambo, 2018). The Keynesian hypothesis therefore contends that debt boosts demand, which 



Economy, 2023, 10(1): 39-49 

44 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

ultimately encourages a rise in investment and production. According to Keynesians, debt does not cost either the 
present or future generations because of  the investments it generates. Therefore, according to them Buchanan (1958), 
the underlying burden of  the national debt is not being passed on to future generations. According to this theory, 
production increases as a result of  the accelerator effect, which happens when debt boosts investment more 
proportionately than demand (Diallo, 2009). 

Their rationale is that, according to Oleksandr (2003) one of  the sources for funding capital creation is external 
debt, and since capital formation financing encourages investment, it fosters economic growth. Ewaida (2017) 
contended that this mechanism is dependent on the effectiveness of  expansionary fiscal policy in increasing output 
and aggregate demand. Additionally, this advantageous effect happens when public debt is utilized to fund either 
productive public capital or public amenities (Attard, 2019; Checherita-Westphal & Rother, 2012). The classical view, 
however, contends that debt prevents consumption and capital creation because it acts as a future tax (Diallo, 2009; 
Oleksandr, 2003; Pattillo, Poirson, & Ricci, 2004; Sheikh, Abbasi, Iqbal, & Masood, 2014). Therefore, due to its 
negative impact, the classical, debt overhang theorists, and crowding-out theorists do not advocate public debt for 
growth.  

Finally, Barro (1979) Ricardian equivalence theory rejected both the Keynesian and the Neoclassical perspectives 
on public debt. However, according to this theory, there is either no relationship or a neutral one between public debt 
and economic growth (Barro, 1989). To put it another way, as long as solvency is not a concern, government debt 
merely explains the distribution of  financial resources among economic agents, with no changes to actual 
macroeconomic variables (Barro, 1989). Since rational people are aware that the government utilizes the power of  
levy to pay off  its debt, they also understand that today's tax cut is equivalent to tomorrow's tax increase. The 
Ricardian equivalence theory states that borrowing and taxation have equal effects when financing government debt 
(Bernheim, 1989). Consequently, in Barro (1974) opinion, according to the Ricardian Equivalence Hypothesis, public 
debt cannot be a tool for stimulating the economy.  

The so-called conventional view of  debt, which mixes Keynesian and Neoclassical viewpoints and maintains that 
the economy exhibits Keynesian behaviour in the short term and classical behaviour in the long term, is also 
mentioned in the literature (Elmendorf  & Mankiw, 1999).  In conclusion, there is disagreement over how public debt 
affects economic growth according to these ideas. The public debt, according to the Neoclassicals, has a detrimental 
impact on economic expansion. The Keynesians, on the other hand, believed that public debt had a beneficial effect 
on economic expansion. The Ricardian equivalence theory also predicted that public debt would have no negative or 
positive effects on economic growth. Bernheim (1987) analysed the Keynesian, Neoclassical, and Ricardian schools 
of  thought about deficit financing, arguing that the Ricardian paradigm should be rejected on theoretical grounds 
because it is based on questionable premises. 
 

3. Methodology and Model Specification 
In this investigation, time series data from 1981 to 2021 was used. Considering the accessibility of  the data, this 

time frame was chosen. Additionally, the debt crisis at the start of  the 1980s had an impact on the majority of  the 
Least Developed Countries (LDCs). Furthermore, the Structural Adjustment Programme (SAP) era, the debt relief  
phase of  2005, the global financial crisis of  2008, and the period of  elevated public borrowing were included in our 
focus. Data from the World Bank (WB), World Development Indicators (WDI) and the Central Bank of  Nigeria 
(CBN) were used for the study. The data on the national debt was provided by the CBN. However, data for the 
remaining variables was gathered from the WB WDI. Tables 1 and 2 present the variable definition, measurement, 
data source, and expected signals for economic growth and public debt models, respectively. 

 
Table 1. Variable definitions, measures and sources of data for the growth model.  

Variable Description Expected sign Source of  data 

Dependent variable 
GDP per capita growth rate GDP per capita (Constant 2015 US$) Dependent variable WB, WDI 

Independent variables 
Public debt stock Public debt stock as a share of  GDP +/- CBN 

Inflation Inflation rate measured by the consumer 
price index 

- WB, WDI 

Openness to trade Trade as a share of  GDP  + WB, WDI 
Debt service Total debt service as a percentage of  exports 

of  goods and services (% of  exports) 
- WB, WDI 

Real effective exchange rate Real effective exchange rate - WB, WDI 

Foreign direct investment Foreign direct investment, net inflows as a 
share of  GDP 

+ WB, WDI 

 
Table 2. Variable definitions, measures and sources of data for the public debt model.  

Variable Description Expected sign Source of  data 

Dependent variable 
Public debt stock Public debt stock as a share of  GDP Dependent variable CBN 

Independent variables 
GDP per capita growth rate GDP per capita (Constant 2015 US$) - WB, WDI 

Inflation Inflation rate measured by the consumer 
price index 

- WB, WDI 

Openness to trade Trade as a share of  GDP + WB, WDI 
Debt service Total debt service as a percentage of  exports 

of  goods and services (% of  exports) 
+ WB, WDI 

Real effective exchange rate Real effective exchange rate - WB, WDI 

Foreign direct investment Foreign direct investment, net inflows as a 
share of  GDP 

- WB, WDI 

 



Economy, 2023, 10(1): 39-49 

45 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

To prevent problems with spurious regression, a time series stability test was conducted. Using the Augmented 
Dickey-Fuller (ADF) and Phillips-Perrons unit root tests, we looked for stationarity in the series. Economic growth 
and public debt have a two-way relationship. Findings from a single equation method like Ordinary Least Squares 
(OLS) will be biased and conflicting (Greene, 2003; Gujarati, 2003). The Two-Stage Least Squares (2SLS) 
methodology will be used in this study to address the endogeneity between economic growth and public debt and 
investigate their relationship. 

In terms of  model specification, the study will specify two equations. The two equations are therefore those that 
relate to public debt and economic growth. The first equation will illustrate how public debt and economic growth 
are related, and the second equation will make clear what produces public debt. All of  the variables were logged. The 
logarithm sign was represented by the symbol ln. The first model was adapted from those made by Geleta (2021); 
Forgha, Mbella, and Ngangnchi (2014), as well as Chukwuagoziem (2012). However, the second model was modified 
using models from Chongo (2013); Forgha et al. (2014) as well as Geleta (2021). The following is how these equations 
are shown: 

𝐿𝑁𝑅𝐺𝐷𝑃𝑡 = 𝛽0 + 𝛽1𝐿𝑁𝑃𝑈𝐵𝐷𝑡 + 𝛽2𝐿𝑁𝐼𝑁𝐹𝑡 + 𝛽3𝐿𝑁𝑂𝑃𝐸𝑁 + 𝛽4𝐿𝑁𝐷𝐸𝐵𝑇𝑆𝑡 + 𝛽5𝐿𝑁𝑅𝐸𝐸𝑅𝑡 + 𝛽6𝐿𝑁𝐹𝐷𝐼𝑡 + 𝜀𝑡    (1) 
 

𝐿𝑁𝑃𝑈𝐵𝐷𝑡 = 𝛽0 + 𝛽1𝐿𝑁𝑅𝐺𝐷𝑃𝑡 + 𝛽2𝐿𝑁𝐼𝑁𝐹𝑡 + 𝛽3𝐿𝑁𝑂𝑃𝐸𝑁𝑡 + 𝛽4𝐿𝑁𝐷𝐸𝐵𝑇𝑆𝑡 + 𝛽5𝐿𝑁𝑅𝐸𝐸𝑅𝑡 + 𝛽6𝐿𝑁𝐹𝐷𝐼𝑡 + 𝜇𝑡   
(2) 

𝑊ℎ𝑒𝑟𝑒: 
𝐿𝑁𝑅𝐺𝐷𝑃 = 𝑅𝑒𝑎𝑙 𝐺𝐷𝑃 𝑝𝑒𝑟 𝑐𝑎𝑝𝑖𝑡𝑎 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
𝐿𝑁𝑃𝑈𝐵𝐷 = 𝑃𝑢𝑏𝑙𝑖𝑐 𝑑𝑒𝑏𝑡 𝑠𝑡𝑜𝑐𝑘 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
𝐿𝑁𝐼𝑁𝐹 = 𝐼𝑛𝑓𝑙𝑎𝑡𝑖𝑜𝑛 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
𝐿𝑁𝑂𝑃𝐸𝑁 = 𝑂𝑝𝑒𝑛𝑛𝑒𝑠𝑠 𝑡𝑜 𝑡𝑟𝑎𝑑𝑒 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
𝐿𝑁𝐷𝐸𝐵𝑇𝑆 = 𝐷𝑒𝑏𝑡 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
𝐿𝑁𝑅𝐸𝐸𝑅 = 𝑅𝑒𝑎𝑙 𝑒𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝑒𝑥𝑐ℎ𝑎𝑛𝑔𝑒 𝑟𝑎𝑡𝑒 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
𝐿𝑁𝐹𝐷𝐼 = 𝐹𝑜𝑟𝑒𝑖𝑔𝑛 𝑑𝑖𝑟𝑒𝑐𝑡 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑙𝑜𝑔𝑎𝑟𝑖𝑡ℎ𝑚 𝑓𝑜𝑟𝑚. 
 

Table 3. ADF unit root test results. 

Variable Augmented Dickey-Fuller (ADF) 
Level First difference I(d) 

LNRGDP -1.1727 -4.0447*** I (1) 
LNPUBD -3.1025** - I (0) 

LNINF -3.4972*** - I (0) 
LNOPEN -2.0659 -7.7559*** I (1) 

LNDEBTS -1.2803 -6.3650*** 1(1) 
LNREER -2.9636** - 1(0) 
LNFDI -3.1537** - 1(0) 

Note: *** and ** indicate statistical significance at the 1% and 5% levels. 

 

4. Data Presentation, Analysis and Discussion of Results 
The variables were either I(0) or I(1), according to the findings of the ADF unit root test in Table 3. All other 

variables were stationary at the first difference, except for public debt, the inflation rate, the real effective exchange 
rate, and foreign direct investment. 
 

Table 4. Estimates of two-stage least-squares for the growth model. 

Dependent variable: LNRGDP 

Variable Coefficient Std. error t-statistic Prob. 

LNPUBD 0.0376 0.0149 2.5287** 0.0163 
LNINF 0.0059 0.0255 0.2302 0.8193 

LNOPEN -0.1275 0.0481 -2.6491*** 0.0122 
LNDEBTS -0.1260 0.0129 -9.7446*** 0.0000 
LNREER -0.0741 0.0443 -1.6732* 0.1035 

LNFDI -0.0510 0.0294 -1.7328* 0.0922 
C 7.8230 0.4298 18.2010*** 0.0000 

Model parameters 
R2 0.8543 
Adjusted R2 0.8286 

F-statistic (Prob.) 33.2350 (0.0000) 
Durbin-Watson statistic 0.9589 

Note:  ***, ** and * indicate statistical significance at the 1%, 5% and 10% levels. 

  
The findings of the equation of economic growth are depicted in Table 4. The results indicate that public debt 

has a positive effect on economic growth. Thus, if public debt increases by one per cent, economic growth would 
increase by 0.04 per cent. This result agrees with the Keynesian suggestions. Consequently, the debt overhang 
hypothesis does not hold in Nigeria. This is an indication that public debt does not dampen economic growth in 
Nigeria. The results of Mensah (2017); Wangmo (2018); Saungweme (2020) and Njoroge (2020) support this result. 
The findings of Chongo (2013); Anning, Ofori, and Affum (2016); Saungweme (2020) and Geleta (2021) contravene 
this outcome. inflation has a positive and insignificant impact on economic growth against expectation. This suggests 
that Nigeria's macroeconomic policy promotes economic growth slightly. The findings of Oteng (2022) agree with 
this outcome. However, the deductions of Njoroge (2020) violate it. 

Unlike what was anticipated, trade openness had a negative effect on economic expansion. Thus, it does not 
promote economic growth in Nigeria. This suggests that a 0.13 per cent rise in trade openness would diminish 
economic growth. In Nigeria, where primary commodities make up the majority of export earnings, this result 



Economy, 2023, 10(1): 39-49 

46 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

emphasizes the importance of varying export and import prices on economic growth, which is a substantial source 
of economic volatility. This observation is not consistent with those of Duru et al. (2021). The real effective exchange 
rate has a negative effect on economic growth as forecasted. This implies that a 0.07 per cent per rise in real effective 
exchange rate would stifle economic growth. This result contradicts Nsonwu (2016) submissions. Contrary to 
expectations, foreign direct investment had a negative impact on economic growth. Hence, it does not contribute to 
economic growth in Nigeria. This implies that a 0.05 per cent rise in foreign direct investment would reduce economic 
growth. The findings of some earlier investigations (Chongo, 2013; Mavhinga, 2015; Njoroge, 2020) do not support 
this. In addition, as was expected, debt service had a negative impact on economic growth. 

This implies that a 0.13 per cent rise in debt service would dampen economic growth. This result aligns with the 
findings of Nsonwu (2016); Elikana (2019); Atoullo (2019); Saungweme (2020) and Oteng (2022). However, it 
contradicts Mavhinga (2015) submissions. The crowding-out effect phenomenon or crowding-out hypothesis is 
consistent with this. This suggests that national debt servicing has a detrimental effect on Nigeria's economic growth. 
The crowding-out effect hypothesis therefore applies to Nigeria. As a result, there is a greater reliance on foreign 
loans due to the debt servicing load. Furthermore, paying off debt uses up resources that could be used to support 
development initiatives, which has a direct detrimental effect on economic growth. This result contradicts Mavhinga 
(2015) and Elikana (2019) submissions. The explanatory factors were able to account for 85% of the total variation 
in the dependent variable, which suggests that the model fits the data well. The Durbin-Watson value of 0.9589 
indicates the presence of positive autocorrelation. The p-value of the F-statistic indicates that the model as a whole 
is statistically significant. 
 

Table 5. Estimates of two-stage least-squares for the public debt model. 

Dependent variable: LNPUBD 

Variable Coefficient Std. error t-statistic Prob. 

LOGRGDP 4.2093 1.6646 2.5287*** 0.0163 
LOGINF -0.0113 0.2698 -0.0419 0.9668 

LOGOPEN 1.5112 0.4958 3.0482*** 0.0044 
LOGDEBTS 0.2109 0.2640 0.7988 0.4299 
LOGREER -0.8391 0.4657 -1.8018 0.0805 

LOGFDI -0.2193 0.3227 -0.6795 0.5014 
C -15.2952 14.6720 -1.0425 0.3045 

Model parameters 
R2 0.6691 
Adjusted R2 0.6107 

F-statistic (Prob.) 11.4577 (0.0000) 
Durbin-Watson statistic 0.4308 

Note:  *** indicates statistical significance at the 1% level. 

 

The 2SLS results as shown in Table 5 indicates that real GDP per capita has a positive impact on the public debt. 
This means that a one per cent increase in real GDP per capita would increase economic growth by 4.21 per cent. 
However, foreign direct investment and the real effective exchange rate exerted a negative and insignificant effect 
on the public debt. The negative and insignificant link between the real effective exchange rate and the public debt 
violates the submissions of Chongo (2013). As was expected, trade openness had a negative effect on public debt. 
This entails that a one per cent rise in trade openness would increase the public debt by 1.51 per cent. Furthermore, 
the results indicated that 67% of the total variation in the dependent variable was accounted for by the explanatory 
variables. Thus, the model has a good fit. The positive autocorrelation is present in our model due to the Durbin-
Watson value of 0.4308. The model is statistically significant owing to the p-value and the F-statistic. 
 

Table 6. Toda and Yamamoto multivariate causality test results. 

Dependent variable Sources of causation 

LNRGDP 𝜒 2 LNPUBD 𝜒 2 

LNRGDP - 540.8503*** 
LNPUBD 173.2946*** - 
Note:  *** Indicates significance at the 1 per cent level. 

 
Table 7. Toda and Yamamoto multivariate causality test results. 

Dependent variable Sources of causation 

LNRGDP 𝜒 2 LNDEBTS 𝜒 2 

LNRGDP - 2.7967 

LNDEBTS 26.2617*** - 
Note:  *** Indicates significance at the 1 per cent level. 

 

Tables 6 and 7 show the outcomes of the Toda and Yamamoto multivariate causality tests. The result in Table 
6 showed a bidirectional correlation between economic growth and governmental debt in Nigeria. Additionally, this 
result raises the possibility that Nigeria could simultaneously work toward reducing its public debt and growing its 
economy. The findings of Reinhart and Rogoff (2010a); Egbetunde (2012); Panizza and Presbitero (2014); Gomez-
Puig and Sosvilla-Rivero (2015); Woo and Kumar (2015); Kobayashi (2015); Donayre and Taivan (2017) and Iitula 
(2018)  are at odds with those of this study. 

It does, however, concur with the arguments made by Geleta (2021); Donayre and Taivan (2017); Egbetunde 
(2012); Owusu-Nantwi and Erickson (2016); Abbas and Christensen (2010) and Ferreira (2009). On the other hand, 
Table 7's findings showed that debt servicing in Nigeria and real GDP per capita have a one-way causal relationship. 
The fact that debt servicing in Nigeria results from economic growth rather than the other way around suggests 
that decisions about debt payment are not made in a way that would disproportionately encourage economic 



Economy, 2023, 10(1): 39-49 

47 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

expansion. The results of this study contradict those of Afxentiou (1993); Amoateng and Amoako-Adu (1996); Jalles 
(2011) and Chukwuagoziem (2012). 
 

5. Conclusion and Recommendations 
The findings of the economic growth model disproved the debt overhang effect theory by demonstrating that 

the effect of public debt on economic growth was both positive and significant. The debt overhang hypothesis, then, 
does not hold in Nigeria. This proves that Nigeria's public debt has no adverse effects on the economic growth of the 
nation. Furthermore, it supports the Keynesian proposition. Additionally, debt service has a detrimental effect on 
economic expansion. This demonstrates that the crowding-out effect, often known as the crowding-out hypothesis, 
exists in Nigeria. This shows that Nigeria's economic growth is negatively impacted by servicing the country's debt. 
Due to the burden of debt servicing, there is a higher reliance on foreign loans. Furthermore, paying off debt uses up 
resources that could be used to finance development initiatives, which has a detrimental effect on economic progress.  

The results of the public debt model demonstrated that real GDP and openness to trade have a positive effect on 
public debt. Furthermore, it was demonstrated that there is a bidirectional relationship between economic growth 
and governmental debt in Nigeria. It suggests that Nigeria can pursue both economic growth and goals for public 
debt management simultaneously. It was also proven that there is a one-way causal relationship between Nigeria's 
real GDP per capita and debt servicing. In Nigeria, debt servicing arises from economic growth rather than the other 
way around, indicating that debt payment decisions are not handled in a way that would unduly favour economic 
growth. Based on the study's findings, the following recommendations are made: The Nigerian government can 
simultaneously pursue its goals for policy regarding public debt and economic growth. Additionally, decisions about 
debt servicing in Nigeria should be made in a way that supports economic expansion.  

It will be impossible for Nigeria to pay off its public debt in the future without accruing extra debt and 
threatening its ability to develop; therefore, it must either adopt other measures to handle the issue or enhance its 
macroeconomic institutions and policies. Nigeria should strengthen its macroeconomic policies in the areas of 
inflation, foreign direct investment, trade, and exchange rate, as well as the effectiveness of its institutions. Effective 
debt management strategies are also required to ensure that borrowed money is used for desirable projects that 
produce foreign currency, rather than pointless undertakings, to promote growth. In addition, the government must 
ensure that loans are applied to capital projects that boost private sector participation. According to the findings, 
doing so would mitigate the negative effects of crowding out private sector expansion. To ensure that Nigeria's public 
debt continues to promote economic growth, the strategies and policies for controlling debt should also be sustained. 
 

References 
Abbas, A. S. M., & Christensen, J. E. (2010). The role of domestic debt markets in economic growth: An empirical investigation for low-income 

countries and emerging markets. IMF Economic Review, 59(4), 717-742.  
Adams, C. S., & Bevan, D. L. (2005). Fiscal deficits and growth in developing countries. Journal of Public Economics, 89(4), 571-597. 

https://doi.org/10.1016/j.jpubeco.2004.02.006 
Aero, O., & Ogundipe, A. (2016). Fiscal deficit and economic growth in Nigeria: Ascertaining a feasible threshold. Journal of Financial Economics, 

8(3), 296–306. https://doi.org/10.2139/ssrn.2861505 
Afxentiou, P. C. (1993). GNP growth and foreign indebtedness in middle-income developing countries. International Economic Journal, 7(3), 81-

92.  
Ahlborn, M., & Schweickert, R. (2016). Public debt and economic growth: Economic systems matter . CEGE Discussion Papers, No. 281, University 

of Gottingen, Center for European, Governance and Economic Development Research (CEGE), Gottingen. 

Akomolafe, K. J., Bosede, O., Emmanuel, O., & Mark, A. (2015). Public debt and private investment in Nigeria. American Journal of Economics, 
5(5), 501– 507.  

Akram, N. (2015). Is public debt hindering economic growth of the Philippines? International Journal of Social Economics, 42(3), 202-221. 
https://doi.org/10.1108/ijse-02-2013-0047 

Akram, N. (2016). Public debt and pro-poor economic growth evidence from South Asian countries. Economic Research-Ekonomska Istraživanja, 
29(1), 746-757.  

Al Kharusi, S., & Ada, M. S. (2018). External debt and economic growth: The case of emerging economy. Journal of Economic Integration, 33(1), 
1141-1157.  

Alves, J. R. B. (2014). The role of government debt on economic growth. Doctoral Dissertation, Universidade de Lisboa Portugal.  
Amoateng, K., & Amoako-Adu, B. (1996). Economic growth, export and external debt causality: The case of African countries. Applied 

Economics, 28(1), 21-27. https://doi.org/10.1080/00036849600000003 
Anning, L., Ofori, C. F., & Affum, E. K. (2016). The impact of government debt on the economic growth of Ghana: A time series  analysis from 

1990-2015. International Journal of Innovation and Economic Development, 2(5), 31–39. http://dx.doi.org/10.18775/ijied.1849-7551-
7020.2015.25.2004 

Atoullo, R. (2019). Public debt and growth in Tajikistan. Master of Asia Pacific Studies/International Cooperation Policy of the Ritsumeikan 
Asia Pacific University.  

Attard, J. (2019). Public debt and economic growth nexus: A dynamic panel ARDL approach . MPRA Paper No. 96023. 
Barro, R. J. (1974). Are government bonds net wealth? Journal of Political Economy, 82(6), 1095-1117.  
Barro, R. J. (1979). On the determination of the public debt. Journal of Political Economy, 87(5), 940-971.  
Barro, R. J. (1989). The ricardian approach to budget deficits. The Journal of Economic Perspectives, 3(2), 37-54. 

https://doi.org/10.1257/jep.3.2.37 
Baum, A., Checherita-Westphal, C., & Rother, P. (2013). Debt and growth: New evidence for the Euro area. Journal of International Money and 

Finance, 32(C), 809-821.  
Bernheim, B. D. (1987). Ricardian equivalence: An evaluation of theory and evidence. In S. Fischer (Ed.), NBER Macroeconomics Annual The 

MIT Press, 2, 263-316. https://doi.org/10.1086/ma.2.4623726 
Bernheim, B. D. (1989). A neoclassical perspective on budget deficits. Journal of Economic Perspectives, 3(2), 55–72. 

https://doi.org/10.1257/jep.3.2.55 

Borensztein, E. (1989). Debt overhang, credit rationing and investment international monetary fund WP 89/74 . Retrieved from 
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=884967 

Bua, G., Pradelli, J., & Presbitero, A. F. (2014). Domestic public debt in low-income countries: Trends and structure. Policy Research Working Paper 
Series No. 6777. 

Buchanan, J. M. (1958). Public principles of the public debt: A defense and restatement United States of America: Richard D. Irwin, Inc . Retrieved from 
https://www.econlib.org/library/Buchanan/buchCv2.html 

Canbek, D. (2014). Public debt and growth: An empirical investigation. M.Sc Economics Thesis of the Middle East Technical University.  

Checherita-Westphal, C., & Rother, P. (2010). The impact of high and growing government debt on economic growth: An empirical investigation for 
the Euro area. ECB Working Paper No. 1237. European Central Bank. 

https://doi.org/10.1016/j.jpubeco.2004.02.006
https://doi.org/10.2139/ssrn.2861505
https://doi.org/10.1108/ijse-02-2013-0047
https://doi.org/10.1080/00036849600000003
http://dx.doi.org/10.18775/ijied.1849-7551-7020.2015.25.2004
http://dx.doi.org/10.18775/ijied.1849-7551-7020.2015.25.2004
https://doi.org/10.1257/jep.3.2.37
https://doi.org/10.1086/ma.2.4623726
https://doi.org/10.1257/jep.3.2.55
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=884967
https://www.econlib.org/library/Buchanan/buchCv2.html


Economy, 2023, 10(1): 39-49 

48 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

Checherita-Westphal, C., & Rother, P. (2011). The impact of government debt on growth: An empirical investigation for the Euro Area. Revue 
Economique, 62(6), 1015-1030. https://doi.org/10.3917/reco.626.1015 

Checherita-Westphal, C., & Rother, P. (2012). The impact of high government debt on economic growth and its channels: An empirical 
investigation for the Euro area. European Economic Review, 56(7), 1392-1405. https://doi.org/10.1016/j.euroecorev.2012.06.007 

Chongo, B. M. (2013). An econometric analysis of the impact of public debt on economic growth: The case of Zambia. M.A. economics dissertation of the 

University of Zambia. Retrieved from 
http://dspace.unza.zm/bitstream/handle/123456789/3133/Chongo%20B%20M..pdf?sequence=1&isAllowed=y 

Chukwuagoziem, A. S. (2012). Foreign debt servicing, capital inflow and economic growth in Nigeria.  M.Sc Economics Thesis of the Department of 
Economics, University of Nigeria, Nsukka.  

Clements, B., Bhattacharya, R., & Nguyen, T. Q. (2003). External debt, public investment and growth in low-income countries. IMF Working Paper 
No. 03/249. 

Diallo, B. (2009). External debt and financing of economic development: A case of Guinea.  Paper presented at the Proceedings of the African Economic 
Conference, Conakry, Republic of Guinea: Ministry of Economy and Finance. 

Diamond, P. A. (1965). National debt in a neoclassical growth model. The American Economic Review, 55(5), 1126-1150.  
Donayre, L., & Taivan, A. (2017). Causality between public debt and real growth in the OECD: A country-by-country analysis. Economic Papers, 

36(2), 156-170.  
Duru, I. U., Eze, M. A., Okafor, B. O. N., Yusuf, A., Ede, L. O., & Saleh, A. S. (2021). Military outlay and economic growth:  The scenarios of 

Lake Chad basin countries of the Republic of Chad and Nigeria. Growth, 8(1), 12– 26.  
Eberhardt, M., & Presbitero, A. F. (2015). Public debt and growth: Heterogeneity and non-linearity. Journal of International Economics, 97(1), 

45-58. https://doi.org/10.1016/j.jinteco.2015.04.005 
Egbetunde, T. (2012). Public debt and economic growth in Nigeria: Evidence from granger-causality. American Journal of Economics, 2(6), 101-

106.  

Egert, B. (2015). Public debt, economic growth and nonlinear effects: Myth or reality? Journal of Macroeconomics, 43(C), 226-238. 
https://doi.org/10.1016/j.jmacro.2014.11.006 

Elikana, F. (2019). The impact of public debt on economic growth of Tanzania 1990-2017. M.Sc Economics Thesis of the Open University of 
Tanzania.  

Elmendorf, D. W., & Mankiw, N. G. (1999). Government debt. In J.B. Taylor & M. Woodford (Eds.), Handbook of Macroeconomics, 1 , 1615-1669.  
European Commission. (2017). Debt sustainability monitor 2016. European Economy Institutional Paper No. 047. 
Ewaida, H. Y. (2017). The impact of sovereign debt on growth: An empirical study on GIIPS versus JUUSD countries. European Research 

Studies Journal, 110(2A), 607-633. https://doi.org/10.35808/ersj/662 
Eze, O. R., & Ogiji, F. O. (2016). Impact of deficit financing on economic stability in Nigeria: Analysis of economic growth.  Journal of Applied 

Finance & Banking, 6(1), 111-125. https://doi.org/10.33140/jerr.02.02.09 
Ferreira, C. (2009). Public debt and economic growth: A Granger-causality panel data approach instituto superior de economia e Gestão. WP24. Technical 

University of lisbon. Retrieved from https://www.repository.utl.pt/handle/10400.5/1863?locale=en 
Forgha, N. G., Mbella, M. E., & Ngangnchi, F. H. (2014). External debt, domestic investment and economic growth in Cameroon: A system 

estimation approach. Journal of Economics Bibliography, 1(1), 3-16. https://doi.org/10.1453/jeb.v1i1.161 
Geleta, M. W. (2021). Public debt and economic growth in Sub-Saharan African countries: A panel data analysis. Economics, 10(3), 68-78. 

https://doi.org/10.11648/j.eco.20211003.11 
Gomez-Puig, M., & Sosvilla-Rivero, S. (2015). The causal relationship between public debt and economic growth in EMU countries. Journal 

of Policy Modelling, 37(6), 974-989. https://doi.org/10.1016/j.jpolmod.2015.09.004 
Gomez-Puig, M., & Sosvilla-Rivero, S. (2018). Public debt and economic growth: Further evidence for the Euro area. Acta Oeconomica, 68(2), 

209-229.  
Greene, W. H. (2003). Econometric analysis (5th ed.). Prentice Hall: Upper Saddle River. 

Greiner, A. (2011). Economic growth, public debt and welfare: Comparing three budgetary rules. German Economic Review, 12(3), 205-222. 
https://doi.org/10.1111/j.1468-0475.2010.00516.x 

Gujarati, D. N. (2003). Basic econometrics (4th ed.). New York: McGraw-Hill. 
Hansen, B. E. (1996). Inference when a nuisance parameter is not identified under the null hypothesis. Econometrica, 64(2), 413-430. 

https://doi.org/10.2307/2171789 
Hansen, B. E. (1999). Threshold effects in non-dynamic panels: Estimation testing and inference. Journal of Econometrics, 93(2), 345-368.  

Hansen, H. (2001). The impact of aid and external debt on growth and investment: Insights from cross-country regression analysis. Paper presented at 
the Paper Presented at the WIDER Conference on debt relief. United Nations University, Helsinki, Finland.  

Hansen, H. (2002). The impact of aid and external debt on growth and investment. University of Nottingham: Centre for Research in Economic 
Development and International Trade. 

Huang, Y., Panizza, U., & Varghese, R. (2018). Does public debt crowd out corporate investment? International evidence IHEID Working Papers No. 
08-2018. Economics section the graduate institute of international studies . Retrieved from https://ideas.repec.org/p/gii/giihei/heidwp08-
2018.html 

Iitula, A. T. (2018). An analysis of the impact of public debt on economic growth of Namibia.  M.Sc Economics Thesis of the University of Namibia.  
Jalles, J. T. (2011). The impact of democracy and corruption on the debt-growth relationship in developing countries. Journal of Economic 

Development, 36(4), 41-72. https://doi.org/10.35866/caujed.2011.36.4.003 

Karazijiene, Z. (2015). Critical analysis of public debt and tendencies of its management. Public Policy and Administration, 14(2), 194–208. 
https://doi.org/10.13165/VPA 

Kobayashi, K. (2015). Public debt overhang and economic growth. Policy Research Institute, Public Policy Review, 11(2), 247-276. 
https://doi.org/10.1111/jere.12077 

Kourtellos, A., Stengos, T., & Tan, C. M. (2013). The effect of public debt on growth in multiple regimes. Journal of Macroeconomics, 38(PA), 
35-43. https://doi.org/10.1016/j.jmacro.2013.08.023 

Krugman, P. (1988). Financing vs forgiving national bureau of economic research WP 2486 . Retrieved from 
https://ideas.repec.org/a/eee/deveco/v29y1988i3p253-268.html 

Krugman, P. (1989). Market-based debt reduction schemes. NBER Working Paper No. 2587. 
Kumar, S. M., & Woo, J. (2010). Public debt and growth IMF Working Paper No. 2010/174. Retrieved from 

https://www.elibrary.imf.org/view/journals/001/2010/174/001.2010.issue-174-en.xml 
Leon, J. M. G., Murillo, J. W. R., & Hernandez, E. A. R. (2019). Public debt and stability in economic growth: Evidence for Latin America. 

International Journal of Economics and Financial Issues, 9(4), 137–147.  
Lwanga, M. M., & Mawejje, J. (2014). Macroeconomic effects of budget deficits in Uganda: A VAR-VECM approach. Research Series, 4(117), 

81–108.  
Mavhinga, P. (2015). The impact of external debt on economic growth in Zimbabwe.  M.Sc Economics Thesis of the School of Development 

Economics, National Institute of Development Administration.  

Mensah, D. (2017). The impact of public debt on economic growth in Ghana (1970-2014). B.Sc Economics Thesis of the Kwame Nkrumah University 
of Science and Technology Kumasi.  

Mhlaba, N., & Phiri, A. (2019). Is public debt harmful towards economic growth? New evidence from South Africa. Cogent Economics & Finance, 
7(1), 1-27. https://doi.org/10.1080/23322039.2019.1603653 

Minea, A., & Parent, A. (2012). Is high public debt always harmful to economic growth? Reinhart and Rogoff and some complex nonlinearities CERDI 
Working Paper No. 2012/18. Retrieved from https://ideas.repec.org/p/cdi/wpaper/1355.html 

Mosikari, T. J., & Eita, J. H. (2021). Asymmetric effect of government debt on GDP growth: Evidence from Namibia. Public Sector Economics, 

45(4), 543–558. https://doi.org/10.3326/pse.45.4.7 
Mupunga, N., & Le Roux, P. (2015). Estimating the optimal growth-maximising public debt threshold for Zimbabwe. Southern African Business 

Review, 19(3), 102-128. https://doi.org/10.3126/nrber.v32i2.35298 

https://doi.org/10.3917/reco.626.1015
https://doi.org/10.1016/j.euroecorev.2012.06.007
http://dspace.unza.zm/bitstream/handle/123456789/3133/Chongo%20B%20M..pdf?sequence=1&isAllowed=y
https://doi.org/10.1016/j.jinteco.2015.04.005
https://doi.org/10.1016/j.jmacro.2014.11.006
https://doi.org/10.35808/ersj/662
https://doi.org/10.33140/jerr.02.02.09
https://www.repository.utl.pt/handle/10400.5/1863?locale=en
https://doi.org/10.1453/jeb.v1i1.161
https://doi.org/10.11648/j.eco.20211003.11
https://doi.org/10.1016/j.jpolmod.2015.09.004
https://doi.org/10.1111/j.1468-0475.2010.00516.x
https://doi.org/10.2307/2171789
https://ideas.repec.org/p/gii/giihei/heidwp08-2018.html
https://ideas.repec.org/p/gii/giihei/heidwp08-2018.html
https://doi.org/10.35866/caujed.2011.36.4.003
https://doi.org/10.13165/VPA
https://doi.org/10.1111/jere.12077
https://doi.org/10.1016/j.jmacro.2013.08.023
https://ideas.repec.org/a/eee/deveco/v29y1988i3p253-268.html
https://www.elibrary.imf.org/view/journals/001/2010/174/001.2010.issue-174-en.xml
https://doi.org/10.1080/23322039.2019.1603653
https://ideas.repec.org/p/cdi/wpaper/1355.html
https://doi.org/10.3326/pse.45.4.7
https://doi.org/10.3126/nrber.v32i2.35298


Economy, 2023, 10(1): 39-49 

49 
© 2023 by the authors; licensee Asian Online Journal Publishing Group 

 

 

Myers, S. C. (1977). Determinants of corporate borrowing. Journal of Financial Economics, 5(2), 147-175. 
https://doi.org/10.1016/j.jcorpfin.2009.02.001 

Njoroge, L. W. N. (2020). Impact of Kenya’s public debt on economic stability. Ph.D Thesis in Public Policy of the Walden University.  
Nsonwu, M. C. (2016). A longitudinal econometric analysis of the effect of debt burden on investment and growth in Sub-Saharan Africa. Ph.D Economics 

Thesis of the Department of Economics, Delta State University, Abraka.  

Nwanedo, S. C. (2021). Assessing the relationship between public debt and economic growth in Nigeria (1981-2019). B.Sc Economics Thesis of the 
Department of Economics, Baze University, Abuja.  

Oleksandr, D. (2003). Nonlinear impact of external debt on economic growth: The case of post-soviet countries. Ph.D Thesis, National University of 
Kyiv-Mohyla Academy.  

Oteng, N. (2022). The effect of external debt on economic growth in Ghana, 1970-2019. M.Sc Economics Thesis of the Faculty of Economics and 
Administration, Department of Economics, Masaryk University.  

Owusu-Nantwi, V., & Erickson, C. (2016). Public debt and economic growth in Ghana. African Development Review, 28(1), 116-126. 
https://doi.org/10.1111/1467-8268.12174 

Panizza, U., & Presbitero, A. F. (2012). Public debt and economic growth: Is there a causal effect? POLIS Working Paper No. 198. 
Panizza, U., & Presbitero, A. F. (2013). Public debt and economic growth in advanced economies: A survey. Swiss Journal of Economics and 

Statistics, 149(2), 175-204. https://doi.org/10.1007/BF03399388 

Panizza, U., & Presbitero, A. F. (2014). Public debt and economic growth: Is there a causal effect? Journal of Macroeconomics, 41(C), 21-41. 
https://doi.org/10.1016/j.jmacro.2014.03.009 

Pattillo, C., Poirson, H., & Ricci, L. (2002). External debt and growth IMF Working Paper No. 02/69 . Retrieved from 
https://www.elibrary.imf.org/view/IMF001/02258-9781451849073/02258-9781451849073/02258-9781451849073.xml 

Pattillo, C. A., Poirson, H., & Ricci, L. A. (2004). What are the channels through which external debt affects growth IMF Working Paper, No. 04/15. 
Retrieved from https://www.elibrary.imf.org/view/journals/001/2004/015/001.2004.issue-015-en.xml 

Pescatori, A., Sandri, D., & Simon, J. (2014). Debt and growth: Is there a magic threshold? IMF working paper No. 14/34. Retrieved from 
https://www.elibrary.imf.org/view/journals/001/2014/034/001.2014.issue-034-en.xml 

Reinhart, C. M., Reinhart, V. R., & Rogoff, K. S. (2012). Public debt overhangs: Advanced-economy episodes since 1800. Journal of Economic 
Perspectives, 26(3), 69-86.  

Reinhart, C. M., & Rogoff, K. S. (2010a). Growth in a time of debt. American Economic Review, 100(2), 573-578.  
Reinhart, C. M., & Rogoff, K. S. (2010b). Debt and growth revisited. MPRA Paper No. 24376. 
Reinhart, C. M., & Rogoff, K. S. (2011). From financial crash to debt crisis. American Economic Review, 101(5), 1676-1706. 

https://doi.org/10.1257/aer.101.5.1676 
Renjith, P. S., & Shanmugam, K. R. (2018). Debt sustainability: Empirical evidence from Indian states. Public Finance & Management, 18(2), 

168-191. https://doi.org/10.1080/13547860.2019.1668138 
Sabina, K.-N. (2018). The relationship between public debt and economic growth: Nonlinearity and country-specificity. MPRA Paper No. 98075. 
Sachs, J. D. (1989). The debt overhang of developing countries in debt stabilisation and development: In G.A. Calvo, R. Findlay, P. Kouri, & J.B. De 

Macedo, (eds.), Essays in memory of Carlos Diaz Alejandro. Oxford: Basil Blackwell. 
Sanchez-Juarez, I., & Garcia-Almada, R. (2016). Public debt, public investment and economic growth in Mexico. International Journal of 

Financial Studies, 4(6), 1-14. https://doi.org/10.3390/ijfs4020006 
Sanusi, K. A., Hassan, A. S., & Meyer, D. F. (2019). Non-linear effects of public debt on economic growth in Southern Africa development 

community (SADC) countries. Int. Journal of Economics and Management, 13(1), 193-202. 
https://doi.org/10.14784/marufacd.1145693 

Saungweme, T. (2020). Public debt, public debt service and economic growth nexus: Empirical evidence from three Southern African countries.  Ph.D 
Economics Dissertation of the University of South Africa.  

Saungweme, T., & Odhiambo, N. M. (2018). The impact of public debt on economic growth: A Review of contemporary literature. The Review 

of Black Political Economy, 54(4), 339-357. https://doi.org/10.1177/0034644619833655 
Schclarek, A. (2004). Debt and economic growth in developing and industrial countries. Lund University Department of Economics Working Paper 

No. 34. 

Serieux, J., & Yiagadeesen, S. (2001). The debt service burden and growth: Evidence from low income countries the North -South institute. Retrieved 
from 
https://www.scirp.org/%28S%28czeh2tfqyw2orz553k1w0r45%29%29/reference/referencespapers.aspx?referenceid=3091287 

Sheikh, M. R., Abbasi, M. N., Iqbal, S., & Masood, S. (2014). External debt sustainability analysis: A Case of SAARC countries. International 
Journal of Management Research and Emerging Science, 4(1), 27–46. https://doi.org/10.56536/ijmres.v4i1.11 

Soares, A. R. (2022). Public debt and economic growth nexus: A meta-analysis approach. Master in Economics Dissertation, Fep Faculdade de 
Economia Universidade do Porto.  

Spilioti, S., & Vamvoukas, G. (2015). The impact of government debt on economic growth: An empirical investigation of the Greek market. 
The Journal of Economic Asymmetries, 12(1), 34-40. https://doi.org/10.1016/j.jeca.2014.10.001 

Szabo, Z. (2013). The effect of sovereign debt on economic growth and economic development public finance quarterly. Corvinus University of 
Budapest, 58(3), 251-270.  

Tchereni, B. H. M., Sekhamptu, T. J., & Ndovi, R. F. (2013). The impact of foreign debt on economic growth in Malawi. Africa Development 
Review, 25(1), 85-90.  

Tsoulfidis, L. (2007). Classical economists and public debt. International Review of Economics, 54(1), 1-12. https://doi.org/10.1007/s12232-007-
0003-8 

Uzoma, K. P., Duru, I. U., Uruakpa, C. G., & Nzeribe, F. (2023). Does public debt matter for economic growth in Nigeria. International Journal 
of Research and Innovation in Social Science, 7(9), 546-566. https://dx.doi.org/10.47772/IJRISS.2023.70946 

Wangmo, S. (2018). The impact of government debt on the economic growth of Bhutan.  Master of Development Policy Thesis of the KDI School of 
Public Policy and Management.  

Weeks, J. (2000). Latin America and high performing Asian economies: Growth and debt. Journal of International Development, 12(5), 625-654. 
https://doi.org/10.1002/1099-1328(200007)12:5%3C625::aid-jid652%3E3.0.co;2-o 

Woo, J., & Kumar, M. S. (2015). Public debt and growth. Economica, 82(328), 705 739.  
Yildirim, S., & Erdogan, K. S. (2021). The impact of public debt on growth: A panel analysis in selected countries. Finansal Araştırmalar ve 

Çalışmalar Dergisi, 14(27), 362-378. https://doi.org/10.14784/marufacd.1145693 

 
 

 

 

  

Asian Online Journal Publishing Group is not responsible or answerable for any loss, damage or liability, etc. caused in relation to/arising out of the use of the content. 
Any queries should be directed to the corresponding author of the article. 

 

https://doi.org/10.1016/j.jcorpfin.2009.02.001
https://doi.org/10.1111/1467-8268.12174
https://doi.org/10.1007/BF03399388
https://doi.org/10.1016/j.jmacro.2014.03.009
https://www.elibrary.imf.org/view/IMF001/02258-9781451849073/02258-9781451849073/02258-9781451849073.xml
https://www.elibrary.imf.org/view/journals/001/2004/015/001.2004.issue-015-en.xml
https://www.elibrary.imf.org/view/journals/001/2014/034/001.2014.issue-034-en.xml
https://doi.org/10.1257/aer.101.5.1676
https://doi.org/10.1080/13547860.2019.1668138
https://doi.org/10.3390/ijfs4020006
https://doi.org/10.14784/marufacd.1145693
https://doi.org/10.1177/0034644619833655
https://www.scirp.org/%28S%28czeh2tfqyw2orz553k1w0r45%29%29/reference/referencespapers.aspx?referenceid=3091287
https://doi.org/10.56536/ijmres.v4i1.11
https://doi.org/10.1016/j.jeca.2014.10.001
https://doi.org/10.1007/s12232-007-0003-8
https://doi.org/10.1007/s12232-007-0003-8
https://dx.doi.org/10.47772/IJRISS.2023.70946
https://doi.org/10.1002/1099-1328(200007)12:5%3C625::aid-jid652%3E3.0.co;2-o
https://doi.org/10.14784/marufacd.1145693

