Global shocks and the debt‐growth nexus
Abstract
Abstract This paper re‐examines the relationship between debt and growth with and without the influence of global shocks for a panel of 22 economies. The analysis introduces an approach that accounts for the complexity of global factors and estimates the debt‐to‐growth and growth‐to‐debt nexus for household, corporate, and public debt from a purely idiosyncratic perspective. The results reveal a multifactor structure: global shocks drive variation in household and public debt, whereas corporate debt exhibits predominantly idiosyncratic dynamics. These global shocks alter the magnitude and statistical significance of the idiosyncratic debt‐growth nexus, demonstrating their critical role in identifying the underlying relationship.
Fields of Study & Subjects
Global Financial Crisis and Policies
Economic Theory and Policy
Banking stability
regulation
efficiency
Publication details
- Journal / source
- Economic Inquiry
- Publisher
- Wiley
- Volume
- 64
- Issue
- 2
- Pages
- 748–767
- Publication date
- 2 February 2026
- Language
- EN