Few researchers have addressed the issue of the causality between public deficit and economic growth. Previous work has predominantly focused on causality using Granger causality technique in time series or in panel data. The current investigation aims to study the relationship between public debt and economic growth using the wavelet transform for different SADC member countries from 2000 to 2024 with annual data. We have characterized the public debt-economic growth relationship on a time-frequency scale. The results indicate a generally strong, non-linear causal link running from public debt to economic growth in the SADC region. However, the sign (positive or negative) and intensity of this relationship vary significantly across different time scales, frequencies, and individual countries, revealing important heterogeneity in the debt-growth nexus. Finally, we can judge through the wavelet transform that this relationship is non-linear.
KeywordsPublic DebtEconomic GrowthWavelet
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