Shiyuan Hu
ABSTRACT
Abstract. Public debt includes central government debt and local government debt. The proportion of public debt to domestic production represents the debt level of a country's government and has a moderating effect on the economy to a certain extent. However, in the economic field, the relationship between public debt and economic growth is not uniform, which has once been a hot topic in the economic field. In this paper, the Gross Domestic Product (GDP) growth rate and debt/GDP value of 20 countries from 1791 to 2009 are included in the exploratory data analysis. But only the data from 1980 to 2005 is applied in regression analysis. Research shows that the relationship between the debt-to-GDP ratio and average GDP growth is positive when the debt-to-GDP ratio falls below a certain value (about 70%). Beyond that point, if the debt-to-GDP ratio continues to rise, it will have a negative impact on average GDP growth.
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