Arzu Alvan* and Gull Afrooz Barati
Affiliation: Department of Economics, Cyprus Science University, Cyprus
Email: [email protected]
Abstract: A significant and controversial topic in the literature of economics and microeconomics is the forecasting of government debt and its impact on economic growth. The purpose of this study is to examine the relationship between government debt and economic growth in both the short-run and long-run. For the purpose of this research study, panel data analyses such as POLS and FEM are used. There are three Asian countries included in this data set (Afghanistan, Iran, and Pakistan). The World Bank Development Indicators and IMF Economic Outlook data from 2000 to 2020 were utilized as a source of annual time series data. According to the study, government debt is positively correlated with economic growth over the long term. Variables do not appear to be related in the short run. Several projects and programs that are very high priority, well appraised and self-sustaining, that are estimated to positively impact economic growth in these countries should be financed with public debt.
Keywordsꓽ Government Debt; Economic Growth; Panel Data Analysis; Vector Error Correction Model; Panel Cointegration; Afghanistan; Iran; Pakistan.