THE IMPACT OF DEBT ON ECONOMIC GROWTH: A COMPARATIVE ANALYSIS OF LOW, MIDDLE AND HIGH INCOME COUNTRIES

Abstract

This study investigates the impact of debt on economic growth in 21 countries comprising from low income, middle income and high income countries by using annual panel data of 23 years from the period of 2000 to 2022. Result of fixed effect model for complete sample shows that the debt has a negative significant impact on economic growth. Results also show the negative significant effect of trade openness on economic growth. Real interest rate and saving have positive and significant impact on economic growth. These results suggest some important policy implications for governments in the sample countries.