The recent European sovereign debt crisis proved public debt issues should not be easily approached. While, prior to the crisis, public debt was of little concern in most of the developed European countries, as there had been no recent episodes of sovereign default, the crisis revived longtime forgotten memories. It once again proved that, although at different debt levels, just like the developing countries the developed ones should fear high public debts and that public debt is almost always a two-sided story: although public indebtedness can promote economic growth, especially when debt resources are used for financing public investment expenditure, when the debt is very high it can negatively affect economic growth. Against this background, in this paper we aim to study the relationship between public debt and economic growth for a panel of 33 European countries (28 European Union Member States and 5 candidate countries to European accession) over the period 1990-2011. More specifically, we investigate if there is evidence of a non-linear (quadratic) relationship, both for the entire European countries group and for the developed and developing countries subgroups. The main sources of data are World Bank’s World Development Indicators and International Monetary Fund’s World Economic Outlook and Historical Public Debt datasets. The results of our study confirm the existence of a „U inverted” relationship, with a maximum debt threshold of about 94% of GDP. After this threshold public debt is expected to negatively affect the economic growth rate, due to higher interest rates, fear of public debt unsustainability and severe budgetary consolidation measures. However, this threshold is found to be more than twice lower in developing European countries compared to the developed ones, as the former enjoy lower credibility, higher vulnerability to shocks and depend more on external capital transfers.

Abstract Background Empirical evidence on the effect of public debt on the economic growth of a country remains ambiguous. No theoretical convergence on the respective nexus has been attained. For the case of Uganda in particular, the public debt question remains critical in the country’s development trajectory. Under the Highly Indebted Poor Countries (HIPCs) initiative, Uganda was the first country to receive a debt relief of worth US$650 million in the 1990s and later in 2006, under the Multilateral Debt Relief Initiative (MDRI), the country generously received 100% debt forgiveness/cancelation which consequently reduced the stock of country’s debt to $1.6 billion. However, of recent, the debt stock has kept on increasing from UGX 14.257 trillion ($5.5 billion) in 2000 to the current UGX 35.3 trillion (9.8b) in July 2017 and it is projected to continue increasing in the short to medium term given the robust NDPII core projects and priorities which are set to attract more borrowing. The study employs the Auto Regressive Distributed Lag (ARDL)-bounds testing approach which is superior and suitable for our small sample. Results The results reveal that public debt has a significant negative impact on economic growth in short run whereas in long-run debt has a mixed impact on Uganda’s economy. The total debt service has a negative impact whereas Gross debt as a share of GDP has a positive impact on the economy. The findings also reveal that Public debt has a negative effect on Uganda’s economic growth in the short run. The impact is however found to be positive in the long run. This result is in line with the study expectations and some findings by earlier researchers who found a negative impact of public debt on GDP and investment. The results suggest that the current trend of Uganda’s borrowing is to continue constraining the resources in the short run. Conclusion The conclusion of the study in view of emerging findings especially on debt, various policy implications have emerged. At the current rate of borrowing, Uganda is likely to have deteriorating economic growth partly because such public borrowing adversely affects investment. The study thus recommends for policies geared toward efficient use of borrowed funds especially for such projects that have high potential to unlock the production capabilities of the country. There is a need for the government of Uganda to institute mechanisms to ensure efficient use of borrowed funds.

The purpose of this study was to present a systematic literature review on the public debt-economic growth nexus. The objective was to provide policymakers and researchers with significant insights on the impact of public debt on economic growth and to provide reliable evidence on the gaps in the literature that require their urgent attention. The study used a systematic review of the literature contained in two databases, namely Semantic Scholar and Google Scholar. The study shows that public debt above the threshold is detrimental to economic growth, while low public debt is conducive to growth, and that the degree of non-linearity in the debt-growth relationship varies considerably depending on the economic status and debt burden of the country. Policymakers in each country should identify the tipping point at which further public debt begins to impede growth. Debt policy should take into account not only fiscal constraints, but also the effectiveness of governance and the possible consequences of eroding public confidence. The study also shows that institutional quality, public investment, production expenditure, foreign direct investment and exports are among the variables that significantly affect the relationship between public debt and economic growth. Policymakers should control the level of public debt and its drivers to support longer-term economic growth. The study also recommends that countries account for public debt and ensure that such debt is acquired only to finance profitable investments that generate future returns, and not for consumption, deficit reduction, wasteful spending, or political purposes.

This study analyzes trends and investigates the relationship between external debt and economic growth in the WAMZ using descriptive trend analysis and panel data analysis. The trend and descriptive analysis assessed the behavior of external debt and economic growth while the empirical analyses employed panel data regression in which a fixed effect model was estimated after the implementation of the Hausman test to verify its appropriateness over the random effect model. The fixed effect model and the dynamic version show that the relationship between external debt and growth in the WAMZ is non-linear "Laffer curve" shaped, confirming the debt overhang theory that the accumulation of external debt beyond a certain threshold adversely affects economic growth. The results also confirm the crowding-out effect of rising external debt stock as the co-efficient of external debt service was negative and statistically significant, indicating that rising debt service associated with high levels of external debt stock limits the use of limited resources (revenue) from being channeled to productive public investments that would accelerate economic growth.

Thus investors felt the EU would help out Greece.[6] Reports in 2009 of Greek government disorganization increased borrowing costs. Greece could no longer borrow to finance its trade and budget deficits at an affordable cost.[4] The Great Recession The Greek crisis was triggered by the Great Recession, which led the budget deficits of several Western nations to reach or exceed 10% of GDP.[7] Greece had high budget deficit (10.2% and 15.1% of GDP in 2008 and 2009, respectively). But at the same time it had high public debt to GDP ratio.[7] Greece appeared to lose control of this ratio, which already reached 127% of GDP in 2009.[8] Being a member of the Eurozone, the country had essentially no autonomous monetary policy flexibility.[9][10] Internal factors In January 2010, the Greek Ministry of Finance published the Stability and Growth Program 2010.[11] The report listed five main causes: poor GDP growth, government debt and deficits, budget compliance and data credibility.

However, the government could not collect enough taxes to fund public services due to extensive tax evasion in the 1990s and 2000s.[19] The pension system also came under immense pressure as the population was aging rapidly. During the financial crisis of 2007–2008, the global economy entered a recession. This created a very difficult situation for Greece as the country had accumulated a high debt over the previous years.[20] The effects of the global financial crisis triggered a debt crisis in Greece that caused a severe recession and an increase in unemployment in the early 2010s.[21] Government spending was cut and taxation was increased, but these measures worsened the recession and caused economic and social unrest.[22][23] As a result of the economic crisis, the country implemented many reforms to its economy in order to improve productivity, reduce debt and attract foreign investment. Recently, Greece's exports reached an all time record for 2022, due to strong economic recovery.[24] Tourism About 30 million tourists visit Greece each year. That is more than the country’s entire population. To serve the many tourists, Greece has many international airports.

In the paper, the authors analyse the interaction between public debt and inflation including the mutual impulse response. The European sovereign debt crisis brought once again a focus onto the consequences of government debt in combination with an expansionary monetary policy for the development of consumer prices. Public deficits can lead to higher inflation rates if the money supply is expansionary. The high level of national debt, not only in the Euro-crisis countries, and the strong increase in the total assets of the European Central Bank, as a result of the unconventional monetary polic