This paper empirically examines the causal relationship between public debt and economic growth in a
sample of the 72 countries consisting of less developed and developing, country-by-country, in the period
of 1970–2015. I apply the Toda-Yamamoto augmented Granger non-causality testing procedure. I observe
a significant causality from economic growth to the public debt of a country in twenty-one countries. In
fifteen countries, there is a unidirectional causality running from the public debt to economic growth. I find
bi-directional causality in only nine countries and no causal relation in twenty-seven economies.
Topic:
Developing World, Economies, Economic Growth, Public Debt, and Causality