Work

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

Year: 2018

Type: article

Abstract: This paper empirically investigates the short and the long run impact of public debt on economic growth. We use annual data from both the central and the peripheral countries of the euro area (EA) for the 1961–2013 period and estimate a production function augmented with a debt stock term by applying the Autoregressive Distributed Lag (ARDL) bounds testing approach. Our results suggest different patterns across the EA countries and tend to support the view that public debt always has a negative impact on the long-run performance of EA member states, whilst its short-run effect may be positive depending on the country.

Source: Acta Oeconomica

DOI: 10.1556/032.2018.68.2.2

Authors: Marta Gómez-Puig, Simón Sosvilla-Rivero

Institutions: Universidad Complutense de Madrid, Universitat de Barcelona

Language: English

Topic: Fiscal Policies and Political Economy

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funders: University of Bath, Ministerio de Economía y Competitividad, Banco de España, Instituto de Estudios Fiscales