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

Mencinger, Jernej; Aristovnik, Aleksander; Verbič, Miroslav

doi:10.5755/j01.ee.26.1.4551

Cited by 42 publications

(49 citation statements)

References 14 publications

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“…Results in this study go in line with the strand of literature that previously dealt with the determinants of private consumption that indicated a negative relationship between debt and consumption and economic growth in emerging markets as well as developed OECD countries (see, for example Berben & Brosens, 2007;Cho & Rhee, 2013;Gogas et al, 2014;Mencinger et al, 2014Mencinger et al, , 2015Randveer, Uusküla, & Kulu, 2012) and the positive relationship between real wages and consumption (Benazić, 2014). However, one of the limitations of this study compared with the aforementioned studies is that it tested only for the linear relationship between the level of household indebtedness and private consumption.…”

Section: Resultssupporting

confidence: 87%

Household debt as a determinant of retail and personal consumption – the case of Croatia

Obadić

Globan

2015

Economic Research-Ekonomska Istraživanja

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The main goal of this paper is to determine the main characteristics and determinants of retail trade in Croatia over the last 20 years, and to analyse its retail turnover in comparison with other EU countries, especially during the last economic crisis. Using a regression model, the paper econometrically tests the hypothesis that the speed of the post-crisis recovery in retail turnover can be explained by the debt levels accumulated in the pre-crisis period. The results of the analysis indicate the negative correlation between variables, which means that the countries that had the lowest levels of accumulated private debt, on average experienced the fastest recovery of retail turnover in the post-crisis period, and vice versa. The weaker correlation has been found in case of retail sales of food, beverages and tobacco products, which leads us to the conclusion that its consumption was not mainly financed by borrowing and, also, that its recovery does not depend primarily on the level of household debt. The analysis for the non-food sector indicated a very high dependence of this type of consumption on household debt, which remains one of the main impediments to its recovery.

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Section: Resultssupporting

confidence: 87%

Household debt as a determinant of retail and personal consumption – the case of Croatia

Obadić

Globan

2015

Economic Research-Ekonomska Istraživanja

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“…Hussain, Haque and Igwike (2015) has conducted a research to find that is debt is a burden for economic growth and the data from 1995-2012 has been taken and garner causality test is applied and the results shows that there negative correlation between the GDP and debt. Mencinger, Aristovnik and Verbic (2015) found the role of external debt in growing economies and a data from 1980-2010 is taken and the results shows that there is a positive negative correlation between debts to GDP ratio. Lahiani and d'Orléans (2015) showed that the external debt effected the economic growth of South Africa.…”

Section: Literature Reviewmentioning

confidence: 97%

The Effect of External Debt in the Economic Growth of Pakistan

Asghar¹

2016

ABC j. adv. res.

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In this study we examine the effect of external debt with the economic growth of Pakistan. External debt is a debt which is held by the creditors of foreign countries in the world. Time series data is collected from the World Bank site for the last thirty years ranges from 1986-2015. Statistics analysis and ordinary least square regression is performed through a descriptive statistical table. To check the relationship between economic growth and external debt OLS model is used. GDP is our dependent variable. Gross domestic saving, gross capital formation and external Debt stock is our independent variable. The results show that the huge amount of number of GDP of country is backed by external debt.

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“…They found an inverted "U" N'Zue 15 relationship with a maximum debt threshold of about 94% of GDP after which public debt negatively affected the economic growth rate. Mencinger et al (2015) determined the turning point of debt-to-GDP ratio and evaluated the impact of levels of indebtedness in public sector on current economic growth for a panel dataset of 36 countries (31 OECD member states and 5 non-OECD EU member countries). The sample was divided into subgroups to distinguish between developed economies, covering the period o f 1980 to 2010, and emerging economies, covering the period 1995 to 2010.…”

Section: Many Scholarsmentioning

confidence: 99%

The Ivorian Debt: Should we worry?

Fofana¹

2018

J. Econ. Int. Finance

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The objective of this paper is to shed light on Cote d'Ivoire's indebtedness and see to what extent, the country's current level of debt is worrisome. This research is parametric using a time series data spanning from 1970 to 2015 to investigate the debt and growth nexus. After investigating the time series characteristics of the data, it was found that the variables were I(1) and co-integrated. Findings show evidence of a nonlinear relationship between debt and growth and more importantly found a threshold point of 42.9% beyond which debt accumulation will negatively affect economic growth. Thus, given the current level of the country's debt level which stood at 48.3%, one should be worried and call on the attention of the authorities for more prudential economic governance.

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

Cited by 42 publications

References 14 publications

Household debt as a determinant of retail and personal consumption – the case of Croatia

Household debt as a determinant of retail and personal consumption – the case of Croatia

The Effect of External Debt in the Economic Growth of Pakistan

The Ivorian Debt: Should we worry?

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