Public debt and economic growth: Further evidence for the euro area

Gómez‐Puig, Marta; Sosvilla‐Rivero, Simón

doi:10.1556/032.2018.68.2.2

Cited by 36 publications

(32 citation statements)

References 61 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Specifically they are in line with Afonso and Jalles (2013), Checherita-Westphal and Rother (2012), Drine and Nabi (2010), Ehigiamusoe and Lean (2019), Greiner (2012), Kumar and Woo (2010), Pattillo et al (2004), Reinhart et al (2012), Schclarek (2004) and Swamy (2019). Our findings are also in line with the studies of Misztal (2010), Gómez-Puig and Sosvilla-Rivero (2015, 2018) and Ferreira (2016), which have examined the case of EU or Eurozone countries and concluded that economic growth is negatively affected by public debt. Further, the other determinants such as investment, human capital and trade openness have a positive impact on economic growth.…”

Section: Econometric Analysissupporting

confidence: 92%

“…If we take a dummy variable into account, the results of the other variables remain the same for the coefficients and are more robust for the significance. The results of a positive contribution of investment, human capital and trade openness on economic growth and a negative contribution of public debt on economic growth are consistent with the studies mentioned in the literature review (Afonso and Jalles, 2013; Checherita-Westphal and Rother, 2012; Drine and Nabi, 2010; Ehigiamusoe and Lean, 2019; Gómez-Puig and Sosvilla-Rivero, 2018; Greiner, 2012; Kumar and Woo, 2010; Misztal, 2010; Pattillo et al, 2004; Schclarek, 2004; Swamy, 2019).…”

Section: Econometric Analysissupporting

confidence: 85%

“…The empirical results show statistically significant bidirectional causality between public debt and economic growth. Gómez-Puig and Sosvilla-Rivero (2018) investigated the short- and long-run effect of public debt on economic growth in the central and peripheral countries of the euro area for the 1961–2013 period. The results show that in the long-run public debt has a negative impact on economic growth, whilst its short-run effect may be positive depending on the country.…”

Section: Review Of Empirical Literaturementioning

confidence: 99%

See 2 more Smart Citations

On the determinants of economic growth: Empirical evidence from the Eurozone countries

Pegkas

Staikouras

Tsamadias

2020

International Area Studies Review

View full text Add to dashboard Cite

This study empirically investigates the causal relationship between economic growth and several factors (investment, human capital, trade openness and public debt) in the Eurozone countries, where imbalances persist several years after the financial crisis. The results reveal a long-run relationship between variables and public debt, as investment, human capital and trade openness positively affect growth. On the other hand, there is a negative long-run effect of public debt on growth. Furthermore, the results indicate that there is long-run unidirectional causality running from investment, trade openness and human capital to growth and bidirectional causality between public debt and growth. The overall results reveal that Eurozone countries should base their growth strategies on fiscal consolidation, increasing exports, correcting the use of public investment and improving the quality of human capital, especially in higher education.

show abstract

Section: Econometric Analysissupporting

confidence: 92%

Section: Econometric Analysissupporting

confidence: 85%

Section: Review Of Empirical Literaturementioning

confidence: 99%

See 1 more Smart Citation

On the determinants of economic growth: Empirical evidence from the Eurozone countries

Pegkas

Staikouras

Tsamadias

2020

International Area Studies Review

View full text Add to dashboard Cite

show abstract

“…The authors defined such situations, when the rising fiscal spending multiplier allows to increase the effectiveness of discretionary measures (Baum & Koester, 2011). Teles and Mussolini (2014) focused attention on the fact that the fiscal policy's effect on economic growth has varied considerably (depending on the public debt-to-GDP ratio). The increase in the debt-to-GDP ratio reduced the positive effects of productive government expenditures on a longterm growth.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Based on performed modeling, it was concluded that (in certain situations) the increase in the public debt has been followed by the higher real GDP growth rates. In that case, government debt was purposeful (transformed into productive expenditures), and fiscal equilibrium, in general, was found (Teles & Mussolini, 2014). Idrisov and Sinelnikov-Muriliev (2013) showed that the possibilities for fiscal policy in the field of economic stimulation were limited.…”

Section: Literature Reviewmentioning

confidence: 99%

Fiscal stimuli and consolidation in emerging market economies

Chugunov

Pasichnyi

2018

Investment Management and Financial Innovations

View full text Add to dashboard Cite

The Great Recession has imposed vital limitations on the policy maker’s ability to react to further economic challenges. In this article, the authors set a purpose to assess the expediency and the size of fiscal consolidation or expansionary measures for countries with emerging markets depending on economic dynamics. The data on the episodes of large changes in fiscal policy, representing both fiscal stimuli and consolidation in Ukraine and in the EU countries with emerging market economies from 2001 to 2017, were evaluated. The authors examined the main reasons of fiscal policy’s volatility and its impact on economic growth. The countries with low and medium level of institutional framework for fiscal policy formulation could face permanent deficit and public debt problem. Episodes of expansionary fiscal adjustments based on government revenues cuts and spending increases were more effective compared with those that were entirely based on spending increases. Empirical investigation showed that successful fiscal consolidation measures obligatory included the government primary spending reduction. In those cases, the budget deficit-to-GDP and public debt-to-GDP ratios were declined. Medium-term priorities to develop the methodical bases of fiscal policy design were justified.

show abstract

Natural resources and economic growth: Does political regime matter for Tunisia?

Kwakwa

Adzawla

Alhassan

et al. 2021

Journal of Public Affairs

View full text Add to dashboard Cite

The discussion on the effect of natural resources on economic growth remains a contentious issue of scientific research. An emerging issue to this discussion is the role of political regime in determining the nature of the growth and natural resource nexus. Consequently, this study examines the effect of natural resources on the economic growth of Tunisia and how the country's political regime moderates this relationship using annual time series data over the 1970–2017 period. Regression analysis established that in the long‐run natural resources generally have positive effects on the country's economic growth, while political regime has mixed effects on economic growth. The interaction between political regime and resources indicates democracy enhances the positive gains from natural resources on economic growth although in the short run, the outcome is mixed. The effects of specific natural resource (oil, mineral, and forest rents) on sectoral growth are positive. Political regime interacts with oil, mineral, and forest rents to propel growth in the agricultural sector. The study concludes that democratic regime is crucial for the effective utilization of resources for long‐run economic growth in the country. Beyond natural resource abundance examined in this study, there is a further need to analyze the extent to which the economy relies on these natural resources and its effect on the economy in future studies. This would elucidate the “natural resource blessings” estimated in this study. The role of other measures of institutional quality on the subject matter can be explored in Tunisia and other countries in future studies.

show abstract

Public debt and economic growth: Further evidence for the euro area

Cited by 36 publications

References 61 publications

On the determinants of economic growth: Empirical evidence from the Eurozone countries

On the determinants of economic growth: Empirical evidence from the Eurozone countries

Fiscal stimuli and consolidation in emerging market economies

Natural resources and economic growth: Does political regime matter for Tunisia?

Contact Info

Product

Resources

About