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Public Debt and Economic Growth: An Empirical Evaluation
Based on a data set of 115 economies, this paper empirically investigates the relation between public debt and economic growth. We find that those countries that present low public debt are characterized by higher economic growth, while the smallest growth rates are associated with high public debt. Nevertheless, this conclusion is tempered when we analyse the countries by income level: low-income countries have a different behaviour with respect to lower-middle, upper-middle and high income countries.