scholarly journals Does Euro Area Membership Affect the Relation between GDP Growth and Public Debt?

2012 ◽  
Author(s):  
Christian Dreger ◽  
Hans-Eggert Reimers
Keyword(s):  
Euro Area ◽  
Public Debt ◽  
Gdp Growth

Public debt and growth in the euro area: evidence from parametric and nonparametric Granger causality

2015 ◽  
Vol 15 (2) ◽  
Author(s):  
Silvestro Di Sanzo ◽  
Mariano Bella
Keyword(s):  
Economic Growth ◽  
The Netherlands ◽  
Granger Causality ◽  
Euro Area ◽  
Public Debt ◽  
Empirical Literature ◽  
Gdp Growth ◽  
Empirical Results ◽  
Causality Tests ◽  
Granger Causality Tests

AbstractMany studies in the empirical literature show that public debt is negatively correlated with economic growth but there is no paper that studies the causal links between these variables using rigorous tests based on Granger’s ideas. Accordingly, we investigate the causal links between debt-to-GDP ratio and economic growth using both linear parametric and nonlinear nonparametric Granger causality tests. We focus on 12 euro countries for the period 1970–2012. Our empirical results suggest a unidirectional causality running from debt to economic growth for Spain and Portugal and a bidirectional causality for Belgium, Germany, Greece, Ireland and Italy. No causality in either direction is identified for Austria, Finland, Luxembourg and the Netherlands. Finally, for France, the tests provide evidence for a unidirectional causality running from GDP growth to debt-to-GDP ratio. In addition, the nonlinear tests indicate that overlooking nonlinearities may result in misleading conclusions about Granger causality. Caveats of the analysis, as well as policy conclusions, are also discussed.

scholarly journals Does euro area membership affect the relation between GDP growth and public debt?

2013 ◽  
Vol 38 ◽  
pp. 481-486 ◽  
Author(s):  
Christian Dreger ◽  
Hans-Eggert Reimers
Keyword(s):  
Euro Area ◽  
Public Debt ◽  
Gdp Growth

scholarly journals Short‐term forecasts of euro area GDP growth

2011 ◽  
Vol 14 (1) ◽  
pp. C25-C44 ◽  
Author(s):  
Elena Angelini ◽  
Gonzalo Camba‐Mendez ◽  
Domenico Giannone ◽  
Lucrezia Reichlin ◽  
Gerhard Rünstler
Keyword(s):  
Euro Area ◽  
Gdp Growth ◽  
Short Term

INTEREST RATE TARGETS AND SPECULATIVE ATTACKS ON PUBLIC DEBT

2018 ◽  
Vol 23 (07) ◽  
pp. 2698-2716 ◽  
Author(s):  
Pompeo Della Posta
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Euro Area ◽  
Public Debt ◽  
Nonlinear Behavior ◽  
Lender Of Last Resort ◽  
Speculative Attacks ◽  
The Interest Rate ◽  
Exchange Rate Target Zones ◽  
Primary Surplus

The application of exchange rate target zones modeling to interest rates allows interpreting the puzzles that emerged with the public debt euro area crisis, namely the nonlinear behavior of the interest rates and the fact that some stand-alone countries, not belonging to the euro area, have not been subject to speculative attacks in spite of equally large public debt-to-gross domestic product (GDP) ratios. As a matter of fact, this model shows that in the case of a noncredible upper threshold for the interest rate (that may be due to both the lack of room for increasing further the required government primary surplus and/or the absence of a monetary authority acting as a lender of last resort), the resulting public debt unsustainability determines an interest rate nonlinearity and makes the crisis possible for public debt levels that would be stable in the presence of a credible interest rate target.

Institutional, Economic, and Social Impacts of Globalization and Liberalization

2021 ◽  
pp. 169-184
Author(s):  
Dilek Murat ◽  
Simla Güzel
Keyword(s):  
European Union ◽  
Public Debt ◽  
Gdp Growth ◽  
Annual Data ◽  
Weighting Method ◽  
Institutional Economic ◽  
Development Levels ◽  
Grey Relational ◽  
Economic And Social Impacts ◽  
Performance Ranking

The present study aimed to rank the financial development levels of European Union (EU) nations and Turkey based on selected financial and economic indicators. Thus, the most recent annual data for these countries (2017) were analyzed with grey relational analysis (GRA). In the analysis, the decision criteria for 24 EU member nations and Turkey were determined as public debt, public expenditure, unemployment rate, Gini coefficient, and GDP growth. The grey coefficient scores obtained in the analysis revealed the financial performance ranking for the analyzed nations. Based on the entropy weighting method (EM) ranking, the top three countries with highest scores were Ireland, Czech Republic, and Slovakia, while the countries with the lowest scores were Spain, Italy, and Greece.

scholarly journals Bid-to-cover and yield changes around public debt auctions in the euro area

2018 ◽  
Vol 87 ◽  
pp. 118-134 ◽  
Author(s):  
Roel Beetsma ◽  
Massimo Giuliodori ◽  
Jesper Hanson ◽  
Frank de Jong
Keyword(s):  
Euro Area ◽  
Public Debt

Finland's reforms may end period of stagnation

2016 ◽  
Keyword(s):  
Public Debt ◽  
Growth Potential ◽  
Gdp Growth ◽  
Demographic Trends ◽  
Content Type ◽  
Economic Stagnation ◽  
One Year ◽  
Pension Age ◽  
The Eu

Subject Finland's economy. Significance The Finnish economy contracted from 2012 to 2014 and grew by only 0.5% last year. It has been facing both structural and cyclical headwinds and since 2010 three different governments have been unable to jump-start it. However, the current one-year-old Finnish government has staked much of its political capital on various reforms which are expected to lead to a resumption of growth and a slower increase in public debt. Impacts Due to demographic trends, Finland's long-term growth potential is estimated to be below 2%. Prolonged economic stagnation in the EU and Russia is likely to depress export and GDP growth. The pension age in Finland will increase automatically as life expectancy rises, which may be a model for other European countries.

scholarly journals The Resilience of the Euro

2021 ◽  
Vol 35 (2) ◽  
pp. 3-22
Author(s):  
Philip R. Lane
Keyword(s):  
Central Bank ◽  
Euro Area ◽  
Public Debt ◽  
Risk Premia ◽  
Policy Support ◽  
Economic Recovery ◽  
Common Currency ◽  
Institutional Reforms ◽  
Fiscal Capacity ◽  
The Common

Over 2014 – 2019, the euro area charted a substantial post-crisis economic recovery while also reducing macro-financial vulnerabilities. The array of post-crisis institutional reforms has improved the capacity of the euro area to withstand adverse shocks, even if the narrowing of imbalances also came at a high cost (especially in the most indebted member countries). The pandemic has provided a new test: the combination of a common central bank and the enlargement of the common fiscal capacity has provided substantial policy support and fostered a narrowing in risk premia, despite significant differences in levels of public debt and exposures to the pandemic shock. While the resilience of the euro is sure to be tested further in the coming years, the extent of the underlying political backing for the common currency should not be underestimated.

scholarly journals Imbalance of the public finance in the context of Keynesian and Non-Keynesian effects of fiscal policy limitation

2017 ◽  
Vol 3 (3) ◽  
pp. 27-32
Author(s):  
Joanna Stawska
Keyword(s):  
Public Finance ◽  
Economic Growth ◽  
Fiscal Policy ◽  
Public Debt ◽  
Statistical Data ◽  
Gdp Growth ◽  
The Public ◽  
Methods Of Analysis ◽  
Restrictive Policy

The purpose of this article is to point out the importance of the size of public debt and deficit in the context of Keynesian and non-Keynesian effects of fiscal policy limitation. To achieve this objective primarily were used methods of analysis of the available literature and presentation of statistical data. Considerations include, among others, the presentation of public debt and deficit in the context of economic growth. Expansionary fiscal policy often caused by economic fluctuations contributes to the deepening of public finance imbalance with frequent decline in GDP growth. The restrictive policy has an influence on improving the situation of the public finance sector in the long-term with at least moderate economic growth.

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