On the relationship between economic growth and government debt for Bulgaria. Test of the Reinhart-Rogoff hypothesis
Based on an extended production function, this paper finds that the turning point of the government debt ratio for Bulgaria is estimated to be 45.2631%, suggesting that an increase in the debt ratio beyond 45.2631% will cause the growth rate of real GDP to decline. This turning point for Bulgaria is...
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| Format: | Article |
| Language: | English |
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General Association of Economists from Romania
2020-12-01
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| Series: | Theoretical and Applied Economics |
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| Online Access: |
http://store.ectap.ro/articole/1502.pdf
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| Summary: | Based on an extended production function, this paper finds that the turning point of the
government debt ratio for Bulgaria is estimated to be 45.2631%, suggesting that an increase in the
debt ratio beyond 45.2631% will cause the growth rate of real GDP to decline. This turning point
for Bulgaria is far less than the 90% turning point proposed by Reinhart and Rogoff. Therefore, the
Reinhart-Rogoff hypothesis does not apply to Bulgaria. |
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| ISSN: | 1841-8678 1844-0029 |