Public Debt and Economic Growth: A Scissor Effect in Developing Countries? The Case of Gabon ()
ABSTRACT
The multiple attempts at empirical evidence, yet
recent, fail to truly dispel the theoretical vagueness of the effects of public
debt on economic growth. The aim of this work is to demonstrate that public overindebtedness
negatively impacts economic activity in developing countries. From estimation
by the generalized moments’ method in the system of the relationship between
economic growth and outstanding public debt on data of the Gabonese economy, we
get that an increase in the public debt in this country, causes a deceleration
of economic activity, thus reflecting a scissor effect between public debt
trend and that of economic growth.
Share and Cite:
Bidzo, M. (2018) Public Debt and Economic Growth: A Scissor Effect in Developing Countries? The Case of Gabon.
Modern Economy,
9, 1672-1686. doi:
10.4236/me.2018.910106.