Abstract
This paper uses the long-dated multicountry historical data on public debt and per capita real GDP to investigate the link between public debt and real output from a long-horizon perspective. Covering 25 developed and developing countries over two centuries, we have found that the debt-to-GDP ratio in 18 out of 25 countries has a significantly negative impact on real output in the long run. The mechanism and transmission channels through which public debt may reduce real output have been further investigated.
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