The Effect of Public Debt on Economic Growth

The influence of debt on macroeconomic stability and the ability to restart growth has been a constant concern since the Second World War period. In recent decades, public debt has increased considerably in most countries. Upward trend of public debt was accompanied by an increase in public spending, in some cases these costs have reached levels difficult to sustain. This is the case of Romania. This paper is divided into two parts. In the first part is shown the evolution and structure of public debt in Romania, and the second part aims to test the link between public debt and growth in the Romanian economy. The research aims to verify if the economic theory is respected, whether between these two variables is set a negative relationship.