Revisiting the role of public debt in economic growth: The case of OECD countries

This paper provides an empirical analysis of the relationship between debt and national output mediated by a measure of the quality of state governance. Using WGIs dataset of 106 countries for the period 1996–2015, the paper analyzes the mediated effect of governance on debt-growth relationship. For this purpose, we use the fixed effect (LSDV) and system GMM estimation technique in order to overcome the possible problem of endogeneity. Results show the non-linear pattern between public debt and economic growth via governance. Although, public debt has negative impact on economic growth, but the results are statistically positive and significant when public debt is interacted with governance, which confirms that governance is a channel by which public debt influences economic growth. Moreover, we calculate the threshold of governance which shows that the public debt has positive impact on economic growth when the governance level is higher than the threshold and adversely affects the economic growth in the case of low level of governance than threshold. Evidence from this study reveals the fact that governance plays a mediating role in debt-growth relationship as there is a pattern of complementarity between public debt and governance: the higher the level of governance, the lesser the adverse effect of public debt on economic growth.

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Is There a Threshold Effect of Public Debt on Economic Growth?

Advances in Finance, Accounting, and Economics - Global Challenges in Public Finance and International Relations ◽

10.4018/978-1-5225-7564-1.ch003 ◽

2019 ◽

pp. 49-64

Author(s):

Seher Gulsah Topuz ◽

Taner Sekmen

Keyword(s):

Economic Growth ◽

Linear Relationship ◽

Public Debt ◽

Threshold Effect ◽

Oecd Countries ◽

Fiscal Policies ◽

The Public ◽

Regression Methods ◽

The Relationship ◽

Panel Threshold Regression

In this chapter, the relationship between public debt and economic growth is examined for OECD countries. In order to determine this relationship, the data between 2002 and 2016 is analyzed using panel threshold regression methods. The findings of the study suggest that the relationship between public debt and economic growth is linear. The public debt threshold is estimated at 99.75% for OECD countries but it is statistically insignificant. While the public debt to GDP ratio is both below and above this threshold, the effect of public debt on economic growth is negative and statistically significant. There is no evidence of the existence of a non-linear relationship between public debt and economic growth. These findings are expected to guide policymakers in the implementation of fiscal policies.

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The role of insurance growth in economic growth: Fresh evidence from a panel of OECD countries

The North American Journal of Economics and Finance ◽

10.1016/j.najef.2020.101217 ◽

2020 ◽

Vol 53 ◽

pp. 101217

Author(s):

Nicholas Apergis ◽

Thomas Poufinas

Keyword(s):

Economic Growth ◽

Oecd Countries

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The influence of health on economic growth from the perspective of sustainable development: a case of OECD countries

World Journal of Entrepreneurship Management and Sustainable Development ◽

10.1108/wjemsd-09-2019-0071 ◽

2020 ◽

Vol 16 (3) ◽

pp. 181-194 ◽

Cited By ~ 1

Author(s):

Seda Yıldırım ◽

Durmus Cagri Yildirim ◽

Hande Calıskan

Keyword(s):

Economic Growth ◽

Cluster Analysis ◽

Sustainable Development ◽

Health Status ◽

Life Expectancy ◽

Oecd Countries ◽

Content Type ◽

Life Expectancy At Birth ◽

Lower Health

PurposeThis study aims to explain the role of health on economic growth for OECD countries in the context of sustainable development. Accordingly, the study investigates the relationship between health and economic growth in OECD countries.Design/methodology/approachThis study employed cluster analysis and econometric methods. By cluster analysis, 12 OECD countries (France, Germany, Finland, Slovenia, Belgium, Portugal, Estonia, Czech Republic, Hungary, South Korea, Poland and Slovakia) were classified into two clusters as high and low health status through health indicators. For panel threshold analysis, the data included growth rates, life expectancy at birth, export rates, population data, fixed capital investments, inflation and foreign direct investment for the period of 1999–2016.FindingsThe study determined two main clusters as countries with high health status (level) and low health status (level), but there was no threshold effect in clusters. It was concluded that an increase in the life expectancy at birth of countries with higher health status had no significant impact on economic growth. However, the increase in the life expectancy at birth of countries with lower health status influenced economic growth positively.Research limitations/implicationsThis study used data that including period of 1999–2016 for OECD countries. In addition, the study used cluster analysis to determine health status of countries, and then panel threshold analysis was preferred to explain significant relations.Originality/valueThis study showed that the role of health on economic growth can change toward country groups as higher and lower health status. It was proved that higher life expectancy can influence economic growth positively in countries with worse or low health status. In this context, developing countries, which try to achieve sustainable development, should improve their health status to achieve economic and social development at the same time.

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The Role of International Technology Spillovers in the Economic Growth of the OECD Countries

Global Economy Journal ◽

10.2202/1524-5861.1035 ◽

2004 ◽

Vol 4 (2) ◽

pp. 1850021 ◽

Cited By ~ 7

Author(s):

Jorge Crespo ◽

Carmela Martín ◽

Francisco J Velázquez

Keyword(s):

Economic Growth ◽

Capital Stock ◽

Oecd Countries ◽

Technology Spillovers ◽

Predominant Role ◽

Per Capita Gdp ◽

Per Capita ◽

International Knowledge ◽

Gdp Gap

This paper explores the role of imports as a mechanism of transmission of international technology spillovers and its significance for the growth of the OECD countries. For this purpose we estimate a version of the growth model proposed by Benhabib and Spiegel (1994), which includes two main modifications in order to better specify the nature of international knowledge diffusion. The first is the inclusion of the R&D capital stock into this framework. The second consist of using a direct measurement of international technology spillovers instead of using per capita GDP gap in respect to the leader country as approach to it. Our results reveal that international technology spillovers transmitted through imports have had a favourable influence on the economic growth of the OECD countries. However, they show the predominant role of the domestic human and R&D capital endowments in economic growth.

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