The dynamic effect of public debt on economic growth in the era of macroprudential policy regime: a Bayesian approach

Simple item page
dc.contributor.authorNkomo, Nomusa Yolanda
dc.contributor.authorNgcobo, Thembeka Sibahle
dc.contributor.authorZungu, Lindokuhle Talent
dc.coverage.conferenceissn
dc.date.accessioned2026-03-03T08:08:11Z
dc.date.available2026-03-03T08:08:11Z
dc.date.issued2023
dc.departmentNameEconomics
dc.description.abstractPurpose – This study aims to test the dynamic impact of public debt and economic growth on newlydemocratized African countries (South Africa and Namibia) and compare the findings with those of newlydemocratized European countries (Germany and Ukraine) during the period 1990–2022. Design/methodology/approach – The methodology involves three stages: identifying theappropriate transition variable, assessing the linearity between public debt and economic growth and selecting the order m of the transition function. The linearity test helps identify the nature of relationships between public debt and economic growth. The wild cluster bootstrap-Lagrange Multiplier test is used toevaluate the model’s appropriateness. All these tests would be executed using the Lagrange Multipliertype of test. Findings – The results signify the policy switch, as the authors find that the relationship between public debt and economic growth is characterized by two transitions that symbolize that the current stage of the relationship is beyond the U-shape; however, an S-shape. The results show that for newly democratized African countries, the threshold during the first waves was 50% of GDP, represented by a U-shape, which then transits to an inverted U-shape with a threshold of 65% of GDP. Then, for the European case, it was 60% of GDP, which is now 72% of GDP. Originality/value – The findings suggest that an escalating level of public debt has a negative impact on economic growth; therefore, it is important to implement fiscal discipline, prioritize government spending and reduce reliance on debt financing. This can be achieved by focusing on revenue generation, implementing effective taxation policies, reducing wasteful expenditures and promoting investment and productivity enhancing measures.
dc.facultyFaculty of Commerce, Administration and Law
dc.identifier.citationNgcobo, T.S., Zungu, L.T. and Nkomo, N.Y. 2023. The dynamic effect of public debt on economic growth in the era of macroprudential policy regime: a Bayesian approach. International Journal of Development Issues, 24(1), pp.16-37.
dc.identifier.issn1758-8553 (online)
dc.identifier.issn1446-8956 (print)
dc.identifier.otherhttp://dx.doi.org/10.1108/IJDI-07-2023-0188
dc.identifier.urihttp://hdl.handle.net/10530/58911
dc.inproceedingsissn
dc.issuenumber24 / 1
dc.keynoteissn
dc.language.isoen
dc.pages16 - 37
dc.peerreviewedYes
dc.publisherEmerald
dc.subjectAfrica
dc.subjectBayesian approach
dc.subjectEconomic growth
dc.subjectEurope
dc.subjectNewly democratized countries
dc.subjectPanel smooth transition regression (PSTR)
dc.subjectPublic debt
dc.titleThe dynamic effect of public debt on economic growth in the era of macroprudential policy regime: a Bayesian approach
dc.title.journalInternational Journal of Development Issues
dc.typeJournal Article
dspace.entity.typePublication
relation.isAuthorOfPublication5f7d23dc-91d2-4704-8d7d-0d9e06d9a360
relation.isAuthorOfPublication.latestForDiscovery5f7d23dc-91d2-4704-8d7d-0d9e06d9a360
relation.isOrgUnitOfPublicationc7eee4fb-1ae2-4b90-a48f-7edbef45aaef
relation.isOrgUnitOfPublication.latestForDiscoveryc7eee4fb-1ae2-4b90-a48f-7edbef45aaef
Files:
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
Nkomo_Nomusa_Yolada_2023.pdf
Size:
592.03 KB
Format:
Adobe Portable Document Format

Nkomo_Nomusa_Yolada_2023.pdf (592.03 KB)

Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
5.24 KB
Format:
Item-specific license agreed upon to submission
Description:

license.txt (5.24 KB)

Download
Collections: Articles