Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis

Oğuzhan Bozatlı

doi:10.25229/beta.1812157

EN TR

Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis

Öz

While public debt is vital for economic growth and development, a heavy debt burden has adverse effects. Therefore, there is a debate about how public debt will affect economic growth. This study investigates the public debt and economic growth nexus in Türkiye using the Fourier-Augmented ARDL methodology over the years 1968-2019. Although Türkiye has a moderate level of public debt, it has significantly lost its fiscal space because of geopolitical risks, irregular migration, natural disasters, inaccurate economic policies, and the economic crises it has frequently faced in the last decade. Our analysis demonstrates that public debt has a detrimental impact on economic growth, as evidenced by linear and nonlinear models. These findings remain consistent even after conducting robustness checks. However, our nonlinear model differs from the majority by indicating a U-shaped relationship between public debt and economic growth, featuring a 61-63% threshold. Therefore, increasing public debt to stimulate growth is not a viable policy. Instead, policymakers should prioritize borrowing to fund productive investments that increase output and employment rather than financing budget deficits and increasing the debt burden. For Türkiye, these initiatives can increase the welfare of present and future generations and make both public debt and economic growth sustainable.

Anahtar Kelimeler

Public Debt, Economic Growth, Fourier-Augmented ARDL

Kamu Borcu ve Ekonomik Büyüme: Her Duruma Uyan Tek Bir Model Mümkün mü? Fourier Tabanlı Ampirik Bulgular

Öz

Kamu borcu ekonomik büyüme ve kalkınma için hayati öneme sahip olsa da aşırı borç yükü olumsuz etkiler yaratmaktadır. Bu nedenle, kamu borcunun ekonomik büyümeyi nasıl etkileyeceği konusunda süregelen bir tartışma bulunmaktadır. Bu çalışma, Türkiye’de kamu borcu ile ekonomik büyüme arasındaki ilişkiyi 1968-2019 dönemi için Fourier-Artırılmış ARDL yöntemiyle incelemektedir. Türkiye’nin kamu borcu seviyesi genel olarak orta düzeyde olmasına rağmen, son on yılda sıkça karşılaşılan jeopolitik riskler, düzensiz göç, doğal afetler, hatalı ekonomik politikalar ve ekonomik krizler nedeniyle mali alanını önemli ölçüde kaybetmiştir. Analizimiz hem doğrusal hem de doğrusal olmayan modellerde kamu borcunun ekonomik büyüme üzerinde olumsuz bir etki yarattığını göstermektedir. Bu bulgular, sağlamlık testleri sonrasında da tutarlılığını korumaktadır. Bununla birlikte, doğrusal olmayan modelimiz çoğu çalışmadan farklı olarak, kamu borcu ile ekonomik büyüme arasında %61–63 eşiği bulunan U şeklinde bir ilişki olduğunu ortaya koymaktadır. Bu nedenle, büyümeyi teşvik etmek amacıyla kamu borcunu artırmak uygulanabilir bir politika değildir. Bunun yerine, politika yapıcıların borçlanmayı bütçe açıklarını finanse etmek veya borç yükünü artırmak yerine, üretimi ve istihdamı artıran verimli yatırımların finansmanına yönlendirmeleri gerekmektedir. Türkiye açısından bu tür girişimler hem mevcut hem de gelecek kuşakların refahını artırabilir ve kamu borcu ile ekonomik büyümeyi sürdürülebilir hale getirebilir.

Anahtar Kelimeler

Kamu Borcu, Ekonomik Büyüme, Fourier-Augmented ARDL

Kaynakça

Abubakar, A. B., & Mamman, S. O. (2021). Permanent and transitory effect of public debt on economic growth. Journal of Economic Studies, 48(5), 1064–1083. https://doi.org/10.1108/JES-04-2020-0154
Afonso, A., & Alves, J. (2015). The Role of Government Debt in Economic Growth. Hacienda Pública Española / Review of Public Economics, 215(4), 9–26. https://doi.org/10.7866/HPE-RPE.15.4.1
Afonso, A., & Jalles, J. T. (2013). Growth and productivity: The role of government debt. International Review of Economics & Finance, 25, 384–407. https://doi.org/10.1016/j.iref.2012.07.004
Agnello, L., & Sousa, R. M. (2015). Can re-regulation of the financial sector strike back public debt?. Economic Modelling, 51, 159-171. https://doi.org/10.1016/j.econmod.2015.07.018
Akram, N. (2011). Impact of Public Debt on the Economic Growth of Pakistan. The Pakistan Development Review, 50(4), 599–615.
Akram, N. (2015). Is public debt hindering economic growth of the Philippines? International Journal of Social Economics, 42(3), 202–221. https://doi.org/10.1108/IJSE-02-2013-0047
Albu, A.-C., & Albu, L.-L. (2021). Public debt and economic growth in Euro area countries. A wavelet approach. Technological and Economic Development of Economy, 27(3), 602-625. https://doi.org/10.3846/tede.2021.14241
Alsamara, M., Mrabet, Z., & Mimouni, K. (2024). The threshold effects of public debt on economic growth in MENA countries: Do energy endowments matter? International Review of Economics & Finance, 89, 458–470. https://doi.org/10.1016/j.iref.2023.10.015
Amann, J., & Middleditch, P. (2020). Revisiting Reinhart and Rogoff after the crisis: A time series perspective. Cambridge Journal of Economics, 44(2), 343–370. https://doi.org/10.1093/cje/bez009
Arčabić, V., Tica, J., Lee, J., & Sonora, R. J. (2018). Public debt and economic growth conundrum: Nonlinearity and inter-temporal relationship. Studies in Nonlinear Dynamics & Econometrics, 22(1). https://doi.org/10.1515/snde-2016-0086

Asteriou, D., Pilbeam, K., & Pratiwi, C. E. (2021). Public debt and economic growth: Panel data evidence for Asian countries. Journal of Economics and Finance, 45(2), 270–287. https://doi.org/10.1007/s12197-020-09515-7
Augustine, B., & Rafi, O. P. C. M. (2023). Public debt - economic growth nexus in emerging and developing economies: Exploring nonlinearity. Finance Research Letters, 52, 103540. https://doi.org/10.1016/j.frl.2022.103540
Aydin, M., & Bozatli, O. (2023). The impacts of the refugee population, renewable energy consumption, carbon emissions, and economic growth on health expenditure in Turkey: New evidence from Fourier-based analyses. Environmental Science and Pollution Research, 30(14), 41286–41298. https://doi.org/10.1007/s11356-023-25181-8
Aydin, M., Degirmenci, T., Bozatli, O., & Balsalobre-Lorente, D. (2024). Fresh evidence of the impact of economic complexity, health expenditure, natural resources, plastic consumption, and renewable energy in air pollution deaths in the USA? An empirical approach. Science of The Total Environment, 921, 171127. https://doi.org/10.1016/j.scitotenv.2024.171127
Bal, D. P. (2025). How much public debt is threshold in India?. Journal of Social and Economic Development, 27(1), 105-119. https://doi.org/10.1007/s40847-023-00308-2
Bal, D. P., & Rath, B. N. (2014). Public debt and economic growth in India: A reassessment. Economic Analysis and Policy, 44(3), 292–300. https://doi.org/10.1016/j.eap.2014.05.007
Barik, A., & Sahu, J. P. (2022). The long-run effect of public debt on economic growth: Evidence from India. Journal of Public Affairs, 22(1), e2281. https://doi.org/10.1002/pa.2281
Barro, R. J. (1974). Are Government Bonds Net Wealth? Journal of Political Economy, 82(6), 1095–1117. http://dx.doi.org/10.1086/260266
Baum, A., Checherita-Westphal, C., & Rother, P. (2013). Debt and growth: New evidence for the euro area. Journal of International Money and Finance, 32, 809–821. https://doi.org/10.1016/j.jimonfin.2012.07.004
Bentour, E. M. (2021). On the public debt and growth threshold: One size does not necessarily fit all. Applied Economics, 53(11), 1280–1299. https://doi.org/10.1080/00036846.2020.1828806
Blanchard, O. (2023). Fiscal Policy under Low Interest Rates. The MIT Press.
Bozatli, O., & Akca, H. (2024). Effectiveness of environmental protection expenditures and resource tax policy in the Netherland's load capacity factor: Do government effectiveness and renewable energy matter? Evidence from Fourier augmented ARDL. Resources Policy, 92, 105030. https://doi.org/10.1016/j.resourpol.2024.105030
Bozatli, O., Serin, S. C., & Demir, M. (2024). The causal relationship between public debt and economic growth in G7 countries: new evidence from time and frequency domain approaches. Economic Change and Restructuring, 57(3), 136. https://doi.org/10.1007/s10644-024-09716-8
Bozatli, O., & Serin, S. C. (2025). Public debt and economic growth in G7 countries: do financial and political institutions matter?. Applied Economics, 1-15. https://doi.org/10.1080/00036846.2025.2490856
Caner, M., Grennes, T. J., & Köhler-Geib, F. (Fritzi) N. (2010). Finding the Tipping Point—When Sovereign Debt Turns Bad (SSRN Scholarly Paper 1612407). https://doi.org/10.2139/ssrn.1612407
Cecchetti, S. G., Mohanty, M. S., & Zampolli, F. (2011). The Real Effects of Debt (SSRN Scholarly Paper 1946170). https://papers.ssrn.com/abstract=1946170
Checherita-Westphal, C., & Rother, P. (2012). The impact of high government debt on economic growth and its channels: An empirical investigation for the euro area. European Economic Review, 56(7), 1392–1405. https://doi.org/10.1016/j.euroecorev.2012.06.007
Chirwa, T. G., & Odhiambo, N. M. (2020). Public Debt and Economic Growth Nexus in the Euro Area: A Dynamic Panel ARDL Approach. Scientific Annals of Economics and Business, 67(3), 291-310. https://doi.org/10.47743/saeb-2020-0016
Chudik, A., Mohaddes, K., Pesaran, M. H., & Raissi, M. (2017). Is There a Debt-Threshold Effect on Output Growth? The Review of Economics and Statistics, 99(1), 135–150. https://doi.org/10.1162/REST_a_00593
Dafermos, Y. (2015). The ‘other half’ of the public debt–economic growth relationship: A note on Reinhart and Rogoff. European Journal of Economics and Economic Policies: Intervention, 12(1), 1-12. https://doi.org/10.4337/ejeep.2015.01.03
Diamond, P.A. (1965). National debt in a neoclassical growth model. American economic review, 55(5), 1126-1150.
Doğan, İ., & Bilgili, F. (2014). The non-linear impact of high and growing government external debt on economic growth: A Markov Regime-switching approach. Economic Modelling, 39, 213–220. https://doi.org/10.1016/j.econmod.2014.02.032
Eberhardt, M., & Presbitero, A. F. (2015). Public debt and growth: Heterogeneity and non-linearity. Journal of International Economics, 97(1), 45–58. https://doi.org/10.1016/j.jinteco.2015.04.005
Égert, B. (2015a). The 90% public debt threshold: The rise and fall of a stylized fact. Applied Economics, 47(34–35), 3756–3770. https://doi.org/10.1080/00036846.2015.1021463
Égert, B. (2015b). Public debt, economic growth and nonlinear effects: Myth or reality? Journal of Macroeconomics, 43, 226–238. https://doi.org/10.1016/j.jmacro.2014.11.006
Enders, W., & Lee, J. (2012). The flexible Fourier form and Dickey–Fuller type unit root tests. Economics Letters, 117(1), 196-199. https://doi.org/10.1016/j.econlet.2012.04.081
Fincke, B., & Greiner, A. (2015). Public Debt and Economic Growth in Emerging Market Economies. South African Journal of Economics, 83(3), 357–370. https://doi.org/10.1111/saje.12079
Gómez-Puig, M., & Sosvilla-Rivero, S. (2025). Assessing heterogeneous time-varying impacts in the debt-growth nexus. Applied Economics, 57(10), 1105-1123. https://doi.org/10.1080/00036846.2024.2311068
Gómez-Puig, M., & Sosvilla-Rivero, S. (2018). Public debt and economic growth: Further evidence for the euro area. Acta Oeconomica, 68(2), 209–229. https://doi.org/10.1556/032.2018.68.2.2
Gómez-Puig, M., Sosvilla-Rivero, S., & Martínez-Zarzoso, I. (2022). On the heterogeneous link between public debt and economic growth. Journal of International Financial Markets, Institutions and Money, 77, 101528. https://doi.org/10.1016/j.intfin.2022.101528
Gunarsa, S., Makin, T., & Rohde, N. (2020). Public debt in developing Asia: A help or hindrance to growth? Applied Economics Letters, 27(17), 1400–1403. https://doi.org/10.1080/13504851.2019.1683147
Ibañez Martín, M. M., Rojas, M. L., & Dabús, C. (2024). Debt, economic growth and threshold effects: Evidence from developing countries. EconomiA, 25(1), 92-108.. https://doi.org/10.1108/ECON-08-2023-0131
Ighodalo Ehikioya, B., Omankhanlen, A. E., Osagie Osuma, G., & Iwiyisi Inua, O. (2020). Dynamic relations between public external debt and economic growth in African countries: a curse or blessing?. Journal of Open Innovation: Technology, Market, and Complexity, 6(3), 88. https://doi.org/10.3390/joitmc6030088
IMF (2024). Public Finances in Modern History. https://www.imf.org/external/datamapper/datasets/FPP
Jones, P. M., & Enders, W. (2014). On the use of the flexible Fourier form in unit root tests, endogenous breaks, and parameter instability. Recent advances in estimating nonlinear models: With applications in economics and finance, 59-83. https://doi.org/10.1007/978-1-4614-8060-0_4
Kourtellos, A., Stengos, T., & Tan, C. M. (2013). The effect of public debt on growth in multiple regimes. Journal of Macroeconomics, 38, 35–43. https://doi.org/10.1016/j.jmacro.2013.08.023
Krugman, P. (1988). Financing vs. Forgiving a debt overhang. Journal of Development Economics, 29(3), 253–268. https://doi.org/10.1016/0304-3878(88)90044-2
Law, S. H., Ng, C. H., Kutan, A. M., & Law, Z. K. (2021). Public debt and economic growth in developing countries: Nonlinearity and threshold analysis. Economic Modelling, 98, 26–40. https://doi.org/10.1016/j.econmod.2021.02.004
Lee, S., Park, H., Seo, M. H., & Shin, Y. (2017). Testing for a Debt-Threshold Effect on Output Growth. Fiscal Studies, 38(4), 701–717. https://doi.org/10.1111/1475-5890.12134
Liu, Z., & Lyu, J. (2021). Public debt and economic growth: Threshold effect and its influence factors. Applied Economics Letters, 28(3), 208–212. https://doi.org/10.1080/13504851.2020.1740157
Lof, M., & Malinen, T. (2014). Does sovereign debt weaken economic growth? A panel VAR analysis. Economics Letters, 122(3), 403–407. https://doi.org/10.1016/j.econlet.2013.12.037
McNown, R., Sam, C. Y., & Goh, S. K. (2018). Bootstrapping the autoregressive distributed lag test for cointegration. Applied Economics, 50(13), 1509–1521. https://doi.org/10.1080/00036846.2017.1366643
Mencinger, J., Aristovnik, A., & Verbic, M. (2014). The Impact of Growing Public Debt on Economic Growth in the European Union. Amfiteatru Economic Journal, 16(35), 403–414.
Mhlaba, N., & Phiri, A. (2019). Is public debt harmful towards economic growth? New evidence from South Africa. Cogent Economics & Finance, 7(1), 1603653. https://doi.org/10.1080/23322039.2019.1603653
Minea, A., & Parent, A. (2012). Is High Public Debt Always Harmful to Economic Growth? Reinhart and Rogoff and some complex nonlinearities (Working Paper E2012.18; Etudes et Documents, pp. 1–24). CERDI. https://ideas.repec.org//p/cdi/wpaper/1355.html
Narayan, P. K. (2005). The saving and investment nexus for China: evidence from cointegration tests. Applied economics, 37(17), 1979-1990. https://doi.org/10.1080/00036840500278103
Ndoricimpa, A. (2020). Threshold effects of public debt on economic growth in Africa: A new evidence. Journal of Economics and Development, 22(2), 187–207. https://doi.org/10.1108/JED-01-2020-0001
Okwoche, P. U., & Nikolaidou, E. (2022). Public debt, growth, and threshold effects: A comparative analysis based on income categories. School of Economics Macroeconomic Discussion Paper Series, Article 2022–02. https://ideas.repec.org//p/ctn/dpaper/2022-02.html
Onofrei, M., Bostan, I., Firtescu, B. N., Roman, A., & Rusu, V. D. (2022). Public Debt and Economic Growth in EU Countries. Economies, 10(10), 254. https://doi.org/10.3390/economies10100254
Owusu-Nantwi, V., & Erickson, C. (2016). Public Debt and Economic Growth in Ghana. African Development Review, 28(1), 116–126. https://doi.org/10.1111/1467-8268.12174
Panizza, U., & Presbitero, A. F. (2013). Public debt and economic growth in advanced economies: A survey. Swiss Journal of Economics and Statistics, 149(2), 175-204. https://doi.org/10.1007/BF03399388
Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica: journal of the Econometric Society, 57(6), 1361-1401. https://doi.org/10.2307/1913712
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Presbitero, A. F. (2012). Total Public Debt and Growth in Developing Countries. The European Journal of Development Research, 24(4), 606–626. https://doi.org/10.1057/ejdr.2011.62
Reinhart, C. M., & Rogoff, K. S. (2010). Growth in a Time of Debt. American Economic Review, 100(2), 573–578. https://doi.org/10.1257/aer.100.2.573
Sam, C. Y., McNown, R., & Goh, S. K. (2019). An augmented autoregressive distributed lag bounds test for cointegration. Economic Modelling, 80, 130–141. https://doi.org/10.1016/j.econmod.2018.11.001
Serin, Ş. C., & Demir, M. (2023). Does public debt and investments create crowding-out effect in Turkey? Evidence from ARDL approach. Sosyoekonomi, 31(55), 151-172. https://doi.org/10.17233/sosyoekonomi.2023.01.08
Serin, Ş. C., & Ünlükaplan, İ. (2022). Is Fiscal Policy in Turkey Pro or Counter-Cyclical? Evidence from the ARDL Analysis. Eskişehir Osmangazi Üniversitesi Sosyal Bilimler Dergisi, 23(2), 264-287. https://doi.org/10.17494/ogusbd.1161380
Shah, S. S. A., Dickinson, D., Tao, K., Wang, C., & Zhang, L. (2025). The heterogenous threshold effects of public debt on economic growth: Empirical evidence from developing countries. Open Economies Review, 36(1), 243-280. https://doi.org/10.1007/s11079-024-09756-7
Šuliková, V., Djukic, M., Gazda, V., Horváth, D., & Kulhánek, L. (2015). Asymmetric Impact Of Public Debt On Economic Growth In Selected Eu Countries. Ekonomický Časopis (Journal of Economics), 63(9), 944-958.
Syed, Q. R., Apergis, N., & Goh, S. K. (2023). The dynamic relationship between climate policy uncertainty and renewable energy in the US: Applying the novel Fourier augmented autoregressive distributed lags approach. Energy, 275, 127383. https://doi.org/10.1016/j.energy.2023.127383
Turan, T. (2019). The Effects of Public Debt on Economic Growth: A Cointegration Analysis for Turkey. Maliye Dergisi, 177, 1–27.
Turan, T., & Yanikkaya, H. (2021). External debt, growth and investment for developing countries: some evidence for the debt overhang hypothesis. Portuguese Economic Journal, 20(3), 319-341. https://doi.org/10.1007/s10258-020-00183-3
UNCTAD. (2023). A World of Debt A growing burden to global prosperity. United Nations. https://unctad.org/publication/world-of-debt/dashboard
WDI (2024). World Bank Open Data. Retrieved April 14, 2024, from https://data.worldbank.org
Wolf, M., & Zessner-Spitzenberg, L. (2024). Fear of Hiking? Rising Interest Rates in Times of High Public Debt. https://www.cerge-ei.cz/pdf/events/papers/3.%20FearOfHiking_Jan2024.pdf
Woo, J., & Kumar, M. S. (2015). Public Debt and Growth. Economica, 82(328), 705–739. https://doi.org/10.1111/ecca.12138
Yolcu Karadam, D. (2018). An investigation of nonlinear effects of debt on growth. The Journal of Economic Asymmetries, 18, e00097. https://doi.org/10.1016/j.jeca.2018.e00097

Ayrıntılar

Birincil Dil

İngilizce

Konular

Maliye Politikası

Bölüm

Araştırma Makalesi

Yazarlar

Oğuzhan Bozatlı ^*
0000-0001-5107-7225
Türkiye

Yayımlanma Tarihi

28 Şubat 2026

Gönderilme Tarihi

28 Ekim 2025

Kabul Tarihi

23 Ocak 2026

Yayımlandığı Sayı

Yıl 2026 Cilt: 11 Sayı: 1

DOI

https://doi.org/10.25229/beta.1812157

IZ

https://izlik.org/JA34NY29BL

APA

Bozatlı, O. (2026). Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis. Bulletin of Economic Theory and Analysis, 11(1), 437-465. https://doi.org/10.25229/beta.1812157

AMA

1.Bozatlı O. Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis. beta. 2026;11(1):437-465. doi:10.25229/beta.1812157

Chicago

Bozatlı, Oğuzhan. 2026. “Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis”. Bulletin of Economic Theory and Analysis 11 (1): 437-65. https://doi.org/10.25229/beta.1812157.

EndNote

Bozatlı O (01 Şubat 2026) Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis. Bulletin of Economic Theory and Analysis 11 1 437–465.

IEEE

[1]O. Bozatlı, “Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis”, beta, c. 11, sy 1, ss. 437–465, Şub. 2026, doi: 10.25229/beta.1812157.

ISNAD

Bozatlı, Oğuzhan. “Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis”. Bulletin of Economic Theory and Analysis 11/1 (01 Şubat 2026): 437-465. https://doi.org/10.25229/beta.1812157.

JAMA

1.Bozatlı O. Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis. beta. 2026;11:437–465.

MLA

Bozatlı, Oğuzhan. “Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis”. Bulletin of Economic Theory and Analysis, c. 11, sy 1, Şubat 2026, ss. 437-65, doi:10.25229/beta.1812157.

Vancouver

1.Oğuzhan Bozatlı. Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis. beta. 01 Şubat 2026;11(1):437-65. doi:10.25229/beta.1812157

Bu dergide yayımlanan eserler Creative Commons Atıf 4.0 Uluslararası Lisansı ile lisanslanmaktadır.

Public Debt and Economic Growth: Does One Size Fit All? Evidence from Fourier-based Empirical Analysis

Öz

Anahtar Kelimeler

Kamu Borcu ve Ekonomik Büyüme: Her Duruma Uyan Tek Bir Model Mümkün mü? Fourier Tabanlı Ampirik Bulgular

Öz

Anahtar Kelimeler

Kaynakça

Ayrıntılar

Birincil Dil

Konular

Bölüm

Yazarlar

Yayımlanma Tarihi

Gönderilme Tarihi

Kabul Tarihi

Yayımlandığı Sayı

DOI

IZ

Kaynak Göster