Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach
This paper investigates the relationship between public debt and economic growth in the context of a panel kink regression with latent group structures. The proposed model allows us to explore the heterogeneous threshold effects of public debt on economic growth based on unknown group patterns. We p...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2024-03-01
|
| Series: | Econometrics |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2225-1146/12/1/7 |
| _version_ | 1827306473274736640 |
|---|---|
| author | Chaoyi Chen Thanasis Stengos Jianhan Zhang |
| author_facet | Chaoyi Chen Thanasis Stengos Jianhan Zhang |
| author_sort | Chaoyi Chen |
| collection | DOAJ |
| description | This paper investigates the relationship between public debt and economic growth in the context of a panel kink regression with latent group structures. The proposed model allows us to explore the heterogeneous threshold effects of public debt on economic growth based on unknown group patterns. We propose a least squares estimator and demonstrate the consistency of estimating group structures. The finite sample performance of the proposed estimator is evaluated by simulations. Our findings reveal that the nonlinear relationship between public debt and economic growth is characterized by a heterogeneous threshold level, which varies among different groups, and highlight that the mixed results found in previous studies may stem from the assumption of a homogeneous threshold effect. |
| first_indexed | 2024-04-24T18:22:01Z |
| format | Article |
| id | doaj.art-12da7c8b6a9241ca8cc1ef2d05071e8d |
| institution | Directory Open Access Journal |
| issn | 2225-1146 |
| language | English |
| last_indexed | 2024-04-24T18:22:01Z |
| publishDate | 2024-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Econometrics |
| spelling | doaj.art-12da7c8b6a9241ca8cc1ef2d05071e8d2024-03-27T13:34:09ZengMDPI AGEconometrics2225-11462024-03-01121710.3390/econometrics12010007Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures ApproachChaoyi Chen0Thanasis Stengos1Jianhan Zhang2Magyar Nemzeti Bank (Central Bank of Hungary), 1054 Budapest, HungaryDepartment of Economics and Finance, University of Guelph, Guelph, ON N1G 2W1, CanadaDepartment of Economics and Finance, University of Guelph, Guelph, ON N1G 2W1, CanadaThis paper investigates the relationship between public debt and economic growth in the context of a panel kink regression with latent group structures. The proposed model allows us to explore the heterogeneous threshold effects of public debt on economic growth based on unknown group patterns. We propose a least squares estimator and demonstrate the consistency of estimating group structures. The finite sample performance of the proposed estimator is evaluated by simulations. Our findings reveal that the nonlinear relationship between public debt and economic growth is characterized by a heterogeneous threshold level, which varies among different groups, and highlight that the mixed results found in previous studies may stem from the assumption of a homogeneous threshold effect.https://www.mdpi.com/2225-1146/12/1/7kink regression modellatent group structurespublic debtdebt threshold |
| spellingShingle | Chaoyi Chen Thanasis Stengos Jianhan Zhang Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach Econometrics kink regression model latent group structures public debt debt threshold |
| title | Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach |
| title_full | Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach |
| title_fullStr | Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach |
| title_full_unstemmed | Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach |
| title_short | Public Debt and Economic Growth: A Panel Kink Regression Latent Group Structures Approach |
| title_sort | public debt and economic growth a panel kink regression latent group structures approach |
| topic | kink regression model latent group structures public debt debt threshold |
| url | https://www.mdpi.com/2225-1146/12/1/7 |
| work_keys_str_mv | AT chaoyichen publicdebtandeconomicgrowthapanelkinkregressionlatentgroupstructuresapproach AT thanasisstengos publicdebtandeconomicgrowthapanelkinkregressionlatentgroupstructuresapproach AT jianhanzhang publicdebtandeconomicgrowthapanelkinkregressionlatentgroupstructuresapproach |