The Impact of Government Expenditure on the Greek Government Debt: An Econometric Analysis

Mah, Gisele; Mukkudem-Petersen, Janine; Miruka, Collins Ogutu; Petersen, Mark A.

doi:10.5901/mjss.2013.v4n3p323

Cited by 16 publications

(30 citation statements)

References 6 publications

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“…This puts a major strain on government debt, especially if unemployment and growth levels continue to be low. These findings are supported by Mah et al (2013) and Milu (1998).…”

Section: Conclusion Cointegrationsupporting

confidence: 75%

Investigating the Key Drivers of Government Debt in South Africa: A Post-Apartheid Analysis

Mothibi¹,

Mncayi²

2019

International Journal of eBusiness and eGovernment Studies

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Over the years, the world has experienced increased and persistent levels of high government debts. This situation has been fuelled by the sluggish economic growth rates and weak revenue collections, particularly in the sub-Saharan region. Using the auto-distributive lag (ARDL) model, the study investigates the key drivers of government debt in South Africa from 1994 to 2017. Findings of this study revealed that there is long-run relationship between government debt and government expenditure, real GDP, inflation and real interest rates, with government expenditure, real GDP and interest rates being the key drivers of government debt in South Africa. Government debt has had a negative impact on economic growth and inflation. In the short run, there are no significant interactions between inflation, real interest rates and government debt. To reduce government debt, the South African government should lean towards improving its productive capacity, controlling interest rates and eliminating non-productive expenditure. Factors such as bailout spending on non-performing and problematic state entities may be avoided by opening for competition to ease the burden off the state as a sole or main funder.

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“…This puts a major strain on government debt, especially if unemployment and growth levels continue to be low. These findings are supported by Mah et al (2013) and Milu (1998).…”

Section: Conclusion Cointegrationsupporting

confidence: 75%

Investigating the Key Drivers of Government Debt in South Africa: A Post-Apartheid Analysis

Mothibi¹,

Mncayi²

2019

International Journal of eBusiness and eGovernment Studies

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“…This implies that government expenditure can be considered a useful tool to stimulate/contain public debt in Namibia. The findings are similar to those of Mah et al (2013), Oladokun (2015) as well as Idnyi, Ogonna and Ifeyinwa (2016). The causality between government expenditure and government revenue was tested to serve in the devising of an optimal strategy to reduce the budget deficit and further reduce public debt.…”

Section: Granger Causalitysupporting

confidence: 89%

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The author wants to thank the two anonymous referees, as well as Maja Bukovšak, Vedran Šošić, Krunoslav Zauder, Mate Rosan, Ervin Duraković, Lana Ivičić and Ivica Rubil for their useful comments and suggestions. I would like to express my gratitude to Mrs Frédérique Savignac from the HFCN, the co-author in the paper by Arrondel, Roger and Savignac (2014) for providing a part of the Stata module to integrate generalized ordered probit models with multiple imputed and weighted data. This paper presents the views of the author and should not be interpreted as reflecting the views or opinions of the Croatian National Bank. **

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“…Therefore, employment rises because spending has risen. The last positive significant association between government spending and total government debt and these findings are consistent with those of Mothibi and Mncayi (2019) and Mah et al (2013). The reality is that the pervasiveness of socio-economic challenges confronting South Africa has increased spending on social security as a reduction strategy which has continued to put considerable strain on government debt given how strained government revenues have been owing to high unemployment levels and a declining economy…”

Section: Ardl Bounds Tests and Long-run Analysissupporting

confidence: 69%

Examining Factors That Drive Government Spending in South Africa

Mdluli¹,

Mncayi²,

Camel³

2019

Proceedings of the 52nd International Academic Conference, Barcelona

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The structure of budgets has changed drastically in the past three decades both globally and locally. Most economies have consistently had growing government spending, some spending way more than what they earn especially following the aftermath of the global financial crisis. Literature shows that government spending in high-income countries has been more on social protection, while public servants compensation has dominated spending in many low-income countries, especially in Africa. In South Africa, a weak investment climate, established years of slow economic progress, rising unemployment and poverty levels which have negatively affected the tax base and therefore revenue collection. The country has been spending more money than it earns, to an enormous degree raising worries to research the drivers of this growth in expenditure, subsequently the essential objective of this study was to pinpoint the key factors that have added to this situation. The study adopted a quantitative research approach through the use of quarterly time series data spanning from 1995 through to 2018. An autoregressive distributed lag (ARDL) model was utilized so as to determine the long-and short-run impacts of the chosen variables on government spending. The findings of the study show that government spending in South Africa, particularly after 1994 has been driven more by current spending than capital spending which presents significant economic effects in the long-run. Among the most significant factors, explicitly in the short run, incorporate unemployment levels, rising debt and inflation. Results further revealed that political instability, low economic growth as well as a growing public size and bailouts of unproductive state owned entities (SOEs) induced significant long term consequences on spending. The continued worsening of spending patterns suggests the presence of fundamental obstacles including the country's high unemployment levels, for both adults and youth, inferring that the revenue base keeps on narrowing, while the growing poverty levels forces spending towards current spending such as the growing social welfare needs rather than productive activities such as investment spending. The study recommends that the size of the public wage bill be reduced and many unproductive SOEs be privatized to relieve spending. Additionally, a multidimensional approach is needed which entails the reduction of debt accumulation to have low interest repayments, restructuring the labour market to improve outcomes, expanding the revenue base, creating an environment conducive to private spending and economic growth and promoting a stable and transparent political climate.

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The Impact of Government Expenditure on the Greek Government Debt: An Econometric Analysis

Abstract: Sovereign debt crisis in advanced economies keep increasing and its government are implementing fiscal policies to reduce it.Greece is an example of a country whose government debt is a matter of grave concern since it has received the second bailout but still threatens to default.

Cited by 16 publications

References 6 publications

Investigating the Key Drivers of Government Debt in South Africa: A Post-Apartheid Analysis

Investigating the Key Drivers of Government Debt in South Africa: A Post-Apartheid Analysis

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Examining Factors That Drive Government Spending in South Africa

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