Nonfinancial Debt and Economic Growth in Euro-Area Countries

Gómez‐Puig, Marta; Sosvilla‐Rivero, Simón

doi:10.2139/ssrn.3003823

Cited by 4 publications

(2 citation statements)

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“…Data on this component was obtained from the World Bank database. Numerous research (Cecchetti et al, 2011;Gómez-Puig & Sosvilla-Rivero, 2017) have utilised population growth as a substitute for labour input. The data for this factor was mostly obtained from the World Bank database.…”

Section: Datamentioning

confidence: 99%

Household Debt and Economic Growth: The Role of Institutional Quality

Samad¹,

Daud²,

Rusmita³

2022

JSSH

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Household debt has a detrimental effect on economic growth. Thus, this study examines the connection between household debt and growth in institutional quality. The impact of ,the relationship on economic growth is assessed using a bias-corrected least square dummy variable of 43 nations. We discovered that institutional quality enhances the role of household debt in sustaining economic growth. Household debt is significantly detrimental to growth when institutional quality is low. Its harmful effect can be lessened with medium institutional quality. Interestingly, higher household debt is beneficial in sustaining growth if accompanied by better institutional quality. Household debt and institutions reinforce each other towards sustaining economic stability for countries with higher institutional quality. The findings are expected to assist central banks and other government authorities in formulating the relevant institutional settings for ensuring economic sustainability, such as prudent debt management and macro-prudential policy. Future studies may consider empirical analysis on a distinct split sample of advanced and emerging economies and employ different estimator methods.

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Section: Datamentioning

confidence: 99%

Household Debt and Economic Growth: The Role of Institutional Quality

Samad¹,

Daud²,

Rusmita³

2022

JSSH

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“…Moreover, Gómez-Puig and Sosvilla [17] investigated long-run and the short effect of increasing debt on economic growth. An annual data from peripheral and central countries of the euro area (EA) between (1961-2013) is used.…”

Section: Review Of Empirical Literaturementioning

confidence: 99%

The Nexus Between Fiscal Policy and Economic Growth for Jordan: Fresh Insights From Maki Cointegration

AL-KASASBEH¹

2022

Innovare J Bus Mgmt

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The current study was carried out to empirically investigate the relationships between government expenditure, taxes, and debt in Jordan, using the annual time series data over the period 1980-2020. Despite the increased awareness of the importance of fiscal policy, Jordan is still seeing a drastic decrease in the volume of growth. Thus, this study was carried out to determine how government expenditure, taxes, and debt affect economic growth. For the empirical analysis, the study adopted Augmented Dicky Fuller, Phillips-Perron unit root tests, Zivot and Andrews and Lumsdaine and Papell unit root tests with structural breaks. It employs recently developed econometric techniques such as Maki cointegration tests allowing for an unknown number of breaks. The results of the cointegration test showed the presence of a cointegration relationship with structural breaks. It was found that the Jordanian crisis that occurred in 1989 harmed economic growth. However, the structural break in 2008 had an affirmative effect on economic growth. According to the study, tax revenues, public deficits, and debt can all be reduced and the economy can thrive if policymakers implement smart fiscal policies that boost gross fixed capital formation.

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JSSH

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Household debt has a detrimental effect on economic growth. Thus, this study examines the connection between household debt and growth in institutional quality. The impact of the relationship on economic growth is assessed using a bias-corrected least square dummy variable of 43 nations. We discovered that institutional quality enhances the role of household debt in sustaining economic growth. Household debt is significantly detrimental to growth when institutional quality is low. Its harmful effect can be lessened with medium institutional quality. Interestingly, higher household debt is beneficial in sustaining growth if accompanied by better institutional quality. Household debt and institutions reinforce each other towards sustaining economic stability for countries with higher institutional quality. The findings are expected to assist central banks and other government authorities in formulating the relevant institutional settings for ensuring economic sustainability, such as prudent debt management and macro-prudential policy. Future studies may consider empirical analysis on a distinct split sample of advanced and emerging economies and employ different estimator methods.

show abstract

Nonfinancial Debt and Economic Growth in Euro-Area Countries

Cited by 4 publications

References 50 publications

Household Debt and Economic Growth: The Role of Institutional Quality

Household Debt and Economic Growth: The Role of Institutional Quality

The Nexus Between Fiscal Policy and Economic Growth for Jordan: Fresh Insights From Maki Cointegration

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