The purpose of this research is to examine the relationship between public debt and the prosperity of Asian countries over the period between 2009 and 2019. By performing a panel threshold technique and using the data from 37 countries in the Asian area, this study provides new evidence on the threshold value of the ratio of public debt to prosperity. Our results show that public debt may promote economic growth. We further find that debt has a negative and statistically significant impact on prosperity at a low level of public debt but is insignificant at a high level of public debt. Therefore, our study suggests that policymakers in Asian countries must consider the level of public debt to avoid negative impacts on the prosperity of countries. In addition, the most crucial issue that governments need to pay attention to is the effective use of public debt, especially those with high public debt to GDP ratio.
