Next Article in Journal
The Measurement of Shear Characteristics of Paddy Soil in Poyang Lake Area
Previous Article in Journal
Turbulence Characteristics in the Mixing Layer of a Submerged Cavitating Jet at High Reynolds Numbers
 
 
Article

Local Government Debt, Financial Circle, and Sustainable Economic Development

Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
Academic Editor: Bruce Morley
Sustainability 2022, 14(19), 11967; https://doi.org/10.3390/su141911967
Received: 5 August 2022 / Revised: 5 September 2022 / Accepted: 17 September 2022 / Published: 22 September 2022
Local government debt is the biggest “gray rhino” of China’s economy and one of the most significant factors affecting the sustainability of economic growth. We use the macroeconomic data of China’s real economy development level and local government debt from 2000 to 2020 to investigate the impact of local government debt on the real economy using the spatial Durbin model, focusing on the impact of the local government debt scale on the development of the real economy in jurisdictions and non-jurisdictions and the intermediation effect of finance under the geospatial correlation characteristics of economic development. The results show that the spatial correlation of the real economy between jurisdictions prevails and the correlation deepens over time. The scale of local government debt in China has exceeded a reasonable threshold, and the crowding-out effect of debt expansion on the real economy is obvious and not limited by jurisdictions, with significant spatial spillover effects. Financial marketization can effectively mitigate the crowding-out effect of local government debt on the real economy. These findings provide useful references for mapping the correlated development characteristics of local government debt and the real economy in China, effectively preventing local government debt risks and high leverage of the real economy and financial systemic risks, and providing effective insights for other countries to resolve government debt problems, prevent crises, and promote local economic development. View Full-Text
Keywords: local government debt; financial cycles; the real economy; spatial Durbin model (SDM); China local government debt; financial cycles; the real economy; spatial Durbin model (SDM); China
Show Figures

Figure 1

MDPI and ACS Style

Tang, Z. Local Government Debt, Financial Circle, and Sustainable Economic Development. Sustainability 2022, 14, 11967. https://doi.org/10.3390/su141911967

AMA Style

Tang Z. Local Government Debt, Financial Circle, and Sustainable Economic Development. Sustainability. 2022; 14(19):11967. https://doi.org/10.3390/su141911967

Chicago/Turabian Style

Tang, Zefeng. 2022. "Local Government Debt, Financial Circle, and Sustainable Economic Development" Sustainability 14, no. 19: 11967. https://doi.org/10.3390/su141911967

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop