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Title: On the bi-directional causal relationship between public debt and economic growth in EMU countries
Author: Gómez-Puig, Marta
Sosvilla Rivero, Simón
Keywords: Deute públic
Creixement econòmic
Països de la Unió Europea
Public debt
Economic growth
European Union countries
Issue Date: Dec-2015
Publisher: Elsevier
Abstract: New evidence is presented on the possible existence of bi-directional causal relationships between public debt and economic growth in both central and peripheral countries of the European Economic and Monetary Union. We test for heterogeneity in the bi-directional Granger-causality across both time and space during the period between 1980 and 2013. The results suggest evidence of a "diabolic loop" between low economic growth and high public debt levels in Spain after 2009. For Belgium, Greece, Italy and the Netherlands debt has a negative effect over growth from an endogenously determined breakpoint and above a debt threshold ranging from 56% to 103% depending on the country.
Note: Versió postprint del document publicat a:
It is part of: Journal of Policy Modeling, 2015, vol. 37, num. 6, p. 974-989
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ISSN: 0161-8938
Appears in Collections:Articles publicats en revistes (Economia)

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