Investigating the Threshold Effects of Government Debts on the Banking System on Economic Growth in Iran

Continuous economic growth combined with low inflation is considered one of the indicators of economic stability. Growth of government debt in Iran To the banking system has raised concerns about its impact on economic growth and the ability of the government to meet its commitments in the future. Due to the importance of the issue, this research has examined the impact of government debt thresholds on economic growth in Iran during the period of 1360- 1395. The data of this research have been extracted from the Central Bank Economic. For this purpose, a smooth transfer regression model (STR) has been used and Eviews software has been used for computing. According to the results of the government debt over the past years, the trend has been bullish and the results of the research indicate that the debt up to the threshold of 45. 4% has a positive effect on economic growth. And after that threshold, rising government debt will have a negative impact on economic growth. The results of this study indicate that there is a negative correlation between government debt to the banking system and economic growth and as a result, economic growth has been reduced.