The impact of public debt on the economic growth. evidence for Kosovo

Fejzulla Beha, Filipos Ruxho

Article ID: 5944
Vol 8, Issue 6, 2024

VIEWS - 1984 (Abstract)

Abstract


This study aims to analyze how public debt influences economic growth in Kosovo, using quarterly data from Q1 2008 to Q4 2022 and employing the generalized method of moments (GMM). The research reveals that there is a negative relationship between public debt and economic growth when other factors such as trade openness, total investment, current account balance, and primary balance are considered. Furthermore, the findings confirm an inverted “U-shaped” relationship between public debt and economic growth, indicating that the optimal debt level is between 27.75% and 36.2% of GDP.


Keywords


public debt; economic growth; GMM; Kosovo

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DOI: https://doi.org/10.24294/jipd.v8i6.5944

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