Public Debt and Economic Growth in Southeast Europe: A Panel Data Approach

Authors : Isuf Qabrati, Fatjona Parallangaj, Luan Vardari

Pages : 113-124

Doi:10.54821/uiecd.1709784

View : 31 | Download : 33

Publication Date : 2025-06-30

Article Type : Research Paper

Abstract :The study examines the complicated relationship between public debt and economic growth in Southeast Europe, a region characterized by different economic landscapes. Through an empirical analysis using panel data and various econometric methods, this study examines the nuanced relationship between the level of public debt and economic progress. The study tests several hypotheses and examines both linear and non-linear relationships between government debt and economic growth. The study draws on a wide range of literature and empirical evidence and tests various theoretical frameworks, including Keynesian theories and threshold effects, to reveal the multi-layered dynamics between debt accumulation and economic performance. The study confirms a significant negative relationship between public debt and economic growth and supports the notion of a threshold beyond which excessive debt hinders economic progress. The results suggest a non-linear relationship between public debt and growth and emphasize the context-specific effects of debt on economic performance. The results show nuanced effects of inflation, corruption, regulatory quality and government effectiveness on economic growth and shed light on the complexity of these relationships. While the study recognizes that debt can stimulate growth if it is channeled into productive investments, it also highlights the need for careful debt management to avoid crossing critical thresholds that could impede economic progress.
Keywords : Kamu Borcu, Ekonomik Büyüme, Güneydoğu Avrupa, Borç Yönetimi

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