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Public debt and economic growth: There is no ‘tipping point’

Public debt and economic growth: There is no ‘tipping point’

The idea that there is a common tipping point in the relationship between public debt and economic growth is still widespread. However, this is likely due to a misinterpretation of the existing evidence. Once we allow for the relationship between debt and growth to be country-specific, there is limited evidence supporting the presence of a within-countries debt threshold.