Role of Uncertainty in Debt-Growth Nexus

Butkus, Mindaugas; Cibulskienė, Diana; Garšvienė, Lina; Šeputienė, Janina

doi:10.18267/j.pep.790

Cited by 3 publications

(2 citation statements)

References 37 publications

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“…Saxegaard et al (2022) applied VAR model to fi nd that rising EPU in Japan caused decline in employment, investment, and output performance. Butkus et al (2022) found that uncertainty moderates the debt-growth relationship such that higher uncertainty engenders increased adverse eff ect of debt on growth. Baker et al (2016) used VAR framework to show that policy uncertainty innovations foreshadow drops in investment, employment, and output in the USA.…”

Section: Empirical Literaturementioning

confidence: 99%

Symmetric or Asymmetric: How is Economic Growth Responding to Global Economic Uncertainty in Africa's Oil Exporters?

Ogbuabor,

Ogbonna,

Anthony-Orji

et al. 2023

Prague Economic Papers

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Motivated by the persistent fall in oil prices due to incessant uncertainty-inducing events in recent years, this study empirically examined if economic growth in Africa's top five oil exporters (Algeria, Angola, Egypt, Libya, and Nigeria) is responding asymmetrically to changes in global economic uncertainty as well as uncertainties from U.S., Europe and China using nonlinear ARDL framework from 1997Q1 to 2021Q4. We find that rising global uncertainty hampers economic growth in these economies, while declining global uncertainty significantly enhances growth in Nigeria, Angola and Libya in the short run, but becomes growth-retarding in the long run. Thus, economic growth responds asymmetrically to global uncertainty, especially in the short run. The findings are robust to U.S., Europe, and China uncertainties, except that economic growth in Libya and Algeria remained unresponsive to U.S. and China uncertainties respectively. We concluded that Africa's oil exporters should embrace policies that can strengthen their resilience to global economic uncertainty as well as uncertainties from U.S., Europe, and China.

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Section: Empirical Literaturementioning

confidence: 99%

Symmetric or Asymmetric: How is Economic Growth Responding to Global Economic Uncertainty in Africa's Oil Exporters?

Ogbuabor,

Ogbonna,

Anthony-Orji

et al. 2023

Prague Economic Papers

View full text Add to dashboard Cite

show abstract

“…The fi ndings showed bi-directional causality for USA alone, and uni-direction causality for Germany and France. Saxegaard et al (2022) applied VAR model to fi nd that rising EPU in Japan caused decline in employment, investment, and output Butkus et al (2022) found that uncertainty moderates the debt-growth relationship such that higher uncertainty engenders increased adverse eff ect of debt on growth. Baker et al (2016) used VAR framework to show that policy uncertainty innovations foreshadow drops in investment, employment, and output in the USA.…”

Section: Empirical Literaturementioning

confidence: 99%

Government Debt and Economic Freedom in the CEE countries. Less is More

Mura,

Donath

2023

Prague Economic Papers

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Government debt has increased not only in times of economic stress, but it has become a common manifestation of government expenditure funding. The aim of the paper is to inspect the effect of government debt on economic freedom in ten CEE countries between 1995 and 2020 using a panel model approach. Selected quantitative and qualitative variables were examined to validate the hypothesis, including public governance indicators, besides the economic ones. Based on a robust panel setting, we conclude that government debt has a negative impact on economic freedom. A causality from government debt to economic freedom is detected together with a long-term equilibrium relationship between them, with both a long-run and a shortrun negative impact of debt on economic freedom. For the considered countries, the gross debt impacts economic freedom and not vice-versa.

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Macroeconomic Policy Coordination and Economic Growth Uncertainty in West Africa

Ugwu,

Ehinomen

2024

Folia Oeconomica Stetinensia

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Research background Understanding the rationale for macroeconomic policy coordination with the aim of achieving greater policy credibility and effectiveness in West Africa still remains the subject of debate. Purpose This study evaluates the effect of macroeconomic policy coordination on economic growth uncertainty in West Africa, utilizing a panel data set of the 15 member states from 1980 to 2020. Research methodology The study employed Pedroni’s cointegration test procedure and the Generalized Linear Model, fixed effect procedure for evaluation. Results The stationarity test results show that the variables are stationary at first difference at the 5% significant level, for the common and individual effect tests respectively. The cross section dependence test result indicates that there exists a cross-sectional independence for the variables under consideration. Pedroni’s cointegration test results indicate that there exists a long run relationship between economic growth uncertainty and macroeconomic policy variables. The fixed effect model result shows that monetary policy variable, inflation (INF) affect growth uncertainty negatively. The fiscal policy variable, government debts (DEBTS) indicates a positive sign to growth uncertainty and is significant statistically. The coefficient of the regional trade variable, (TRADE) and exchange rate indicate positive signs and are insignificant statistically. Novelty It is important to ascertain how uncertainty affect policy coordination gains. Thus this study has utilized the econometric models approach to evaluate the effect of policy decisions as economies encounter exogenous policy shocks in the face of uncertainty, in order to ascertain if coordination is preferred to individual policy decisions.

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Role of Uncertainty in Debt-Growth Nexus

Cited by 3 publications

References 37 publications

Symmetric or Asymmetric: How is Economic Growth Responding to Global Economic Uncertainty in Africa's Oil Exporters?

Symmetric or Asymmetric: How is Economic Growth Responding to Global Economic Uncertainty in Africa's Oil Exporters?

Government Debt and Economic Freedom in the CEE countries. Less is More

Macroeconomic Policy Coordination and Economic Growth Uncertainty in West Africa

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