Pregled bibliografske jedinice broj: 806593
On the Causal Relationship between Public Debt and GDP Growth Rates in Panel Data Models
On the Causal Relationship between Public Debt and GDP Growth Rates in Panel Data Models, 2014. (rukopis).
CROSBI ID: 806593 Za ispravke kontaktirajte CROSBI podršku putem web obrasca
Naslov
On the Causal Relationship between Public Debt and GDP Growth Rates in Panel Data Models
Autori
Tica, Josip ; Lee, Junsoo ; Sonora, Robert J. ; Arčabić, Vladimir
Izvornik
EFZG Working Paper Series/EFZG Serija članaka u nastajanju
Vrsta, podvrsta
Ostale vrste radova, rukopis
Godina
2014
Ključne riječi
Public debt; Feedback Effect; Reverse Causality; Panel VAR models
Sažetak
The influential and controversial paper by Reinhart and Rogoff (2010) triggered a debate on the effects of public debt on economic growth. Subsequent papers provide more convincing results. However, one of the key assumptions implied in these studies is that lower economic growth is spurred by high debt. If the reverse causality holds, the usual estimation of the model can yield biased estimators because of a feedback effect. We formally examine the causal relationship between public debt and economic growth in the panel VAR model using Granger causality test. Results show that the inter-temporal causal relationship is bi-directional. These findings provide a warning regarding the estimation results in many previous studies that might have ignored the role of the feedback effect.
Izvorni jezik
Engleski
Znanstvena područja
Ekonomija
POVEZANOST RADA
Ustanove:
Ekonomski fakultet, Zagreb
