Aminudin Ma’ruf, Mohammad Wasil, Dimas Galih Saputra
This paper investigates the asymmetric relationship between public debt and economic growth by incorporating inflation and the total gross savings from 1976 to 2022. The study used the nonlinear autoregressive distributed lag bounds testing approach to examine the asymmetric cointegration between the variables. An asymmetric causality test also examines the causal association between the considered variables. The results indicate cointegration between the variables in the presence of asymmetries. The findings on asymmetric causality suggest that all the variables, public debt, inflation, and savings, affect economic growth. Lastly, the implications of these results for Indonesia's growth policies are also explored because this will have important implications for policymakers in Indonesia, highlighting the need for sustainable fiscal policies and debt management strategies to ensure long-term economic stability. © Aminudin Ma’ruf et al.
Department of Economics, Faculty of Economics and Business, Universitas Negeri Surabaya, Indonesia
