• Bhavesh kumar
• Lotica surana

Abstract This paper investigates the causal relationships between public debt and economic growth in developing countries, with a specific focus on Ghana, against the backdrop of increasing debt levels and varying economic performance exacerbated by the COVID-19 pandemic. Employing a dynamic multivariate autoregressive-distributed lag (ARDL) Granger-causality model, the study analyzes annual time-series data spanning 1978 to 2018 sourced from the World Bank Development Indicator database and the IMF Fiscal Affairs Department Database and WEO. The findings reveal that in the short run, public debt does not Granger-cause GDP, but in the long run, a unidirectional causality from public debt to GDP exists. Additionally, investment spending initially shows a negative bi-directional relationship with GDP, which reverses to positive in the long run. Government consumption expenditure does not exhibit short-term causal links with GDP but does so in the long term. Moreover, public debt impacts inflation positively in the short term. The implications suggest that maintaining fiscal discipline is crucial for effective debt utilization, particularly directing loans towards high-priority and evaluated investment projects that are self-sustaining and contribute positively to GDP growth. This study contributes new empirical insights to the literature on public debt and economic growth, specifically from a developing country perspective, confirming that public debt can influence GDP growth over the long term.

GDP, Public debt, Government consumption expenditure, Investment spending, Inflation rate, Population growth rate

"Public Debt and Economic Growth: Contemporary Insights from a Developing Economy – A Case Study of India”", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.11, Issue 6, page no.g544-g573, June-2024, Available :http://www.jetir.org/papers/JETIRTHE2132.pdf

"Public Debt and Economic Growth: Contemporary Insights from a Developing Economy – A Case Study of India”", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.11, Issue 6, page no. ppg544-g573, June-2024, Available at : http://www.jetir.org/papers/JETIRTHE2132.pdf