Re Examining The Debt Growth Nexus
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Re Examining The Debt Growth Nexus
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Author : Marta Gómez Puig
language : en
Publisher:
Release Date : 2019
Re Examining The Debt Growth Nexus written by Marta Gómez Puig and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
This paper uses panel data for 116 countries over the period 1995-2016 to investigate the heterogeneity of the debt-growth nexus across countries and the factors underlying it. In the first step, the grouped fixed effects (GFE) estimator proposed by Bonhomme and Manresa (2015) is used to classify countries into groups, with group membership being endogenously determined. In the second step, a multinomial logit model is used to explore the drivers of the heterogeneity detected, among them the quality of institutions, the composition of debt-funded public expenditure, the relative public and private indebtedness, and the maturity of debt. Finally, the underlying factors explaining the time-varying impact of public debt on growth in the country groups identified is also investigated.
It S The Debt Growth Nexus Again Evidence From A Long Panel Of Regional Government Liabilities
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Author : Timo Mitze
language : en
Publisher:
Release Date : 2013
It S The Debt Growth Nexus Again Evidence From A Long Panel Of Regional Government Liabilities written by Timo Mitze and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
In this paper, we study the long- and short-run relationship between regional public debt and economic performance for a sample of German federal states over the period of four decades (1970-2010). By choosing a sample of regional entities with comparable institutional settings, we complement the large literature on the debt-growth nexus based on heterogeneous cross-country samples. We estimate a dynamic error correction model that accounts for slope heterogeneity among cross-sections and the presence of unobserved common factors. While - in line with the Keynesian view - our findings hint at a non-linear inverted U-shape relationship between changes in the public debt intensity and economic growth in the short-run, we get strong statistical evidence for linear negative relationship between regional public depth and per capita GDP in the long-run. By means of a simple though experiment, we show that these negative longrun effects are not negligible for the size of interregional differences in per capita GDP levels and are in line with most international evidence on the detrimental growth effects of high public debt levels. Finally, these results also underline the need for effective fiscal rules at the federal state level in Germany.
Public Debt And Growth
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Author : Jaejoon Woo
language : en
Publisher: International Monetary Fund
Release Date : 2010-07-01
Public Debt And Growth written by Jaejoon Woo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-07-01 with Business & Economics categories.
This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity. In addition, threshold effects, nonlinearities, and differences between advanced and emerging market economies are examined. The empirical results suggest an inverse relationship between initial debt and subsequent growth, controlling for other determinants of growth: on average, a 10 percentage point increase in the initial debt-to-GDP ratio is associated with a slowdown in annual real per capita GDP growth of around 0.2 percentage points per year, with the impact being somewhat smaller in advanced economies. There is some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. Analysis of the components of growth suggests that the adverse effect largely reflects a slowdown in labor productivity growth mainly due to reduced investment and slower growth of capital stock.
Growth Beyond The Debt Thresholds
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Author : Sine Kontbay
language : en
Publisher:
Release Date : 2013
Growth Beyond The Debt Thresholds written by Sine Kontbay and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
Abstract: This empirical study has two objectives both of which are directly related to nonlinear effects of debt on growth: The main objective is to assess the levels of public debt-to-GDP and total external debt-to-GDP ratios above which economic growth is impaired. The second objective is to examine the debt overhang effects on the sources of growth. A large panel data set of developed and developing countries over the period of 1970-2009 is employed to estimate the threshold levels for public and total external debt. The dynamic panel threshold method developed by Kremer et. al (2010) is applied to debt-growth nexus for the first time to estimate the debt thresholds. The method estimates threshold values from the data rather than imposing arbitrary values to study the debt threshold effects as had been done in the literature until now. The level of public debt above which the growth starts being a burden is 69% for high income OECD countries, 47% for middle income countries and 30% for low income. The model is modified to distinguish between the marginal and average debt overhang effects on growth. For high income OECD countries, once public debt-to-GDP exceeds the threshold, each additional unit of public debt lowers growth rate significanlty by about 0.1 percentage point. In middle income countries, however, the public debt overhang effect is observed through a significant slow down in average growth rate rather than a marginal impact on growth. For external debt, the threshold is around 80% for high income OECD countries, 50% for middle income countries, and 70% for low income group. Once these thresholds are exceeded, all countries face with a considerable decrease in their growth rates but the impact of each additional unit of external debt above the threshold is not significant. Therefore, countries' trend-growth is not effected as they accumulate more external debt beyond the threshold. For both public and external debt, the negative realtionship between debt and growth is mostly due to the decrease in capital stock accumulation for high debt levels rather than TFP growth.
Global Waves Of Debt
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Author : M. Ayhan Kose
language : en
Publisher: World Bank Publications
Release Date : 2021-03-03
Global Waves Of Debt written by M. Ayhan Kose and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-03-03 with Business & Economics categories.
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Public Debt And Economic Growth
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Author : Alfred Greiner
language : en
Publisher: Springer Science & Business Media
Release Date : 2009-07-24
Public Debt And Economic Growth written by Alfred Greiner and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-07-24 with Business & Economics categories.
Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether empirical evidence for that rule can be found. Additional tests are implemented to gain further evidence on sustainability of public debt. In order to allow for time varying coefficients penalized spline estimations are performed. The theoretical chapters present endogenous growth models and assume that the primary surplus rises as public debt increases so that sustainability of public debt is given. Implications of public deficits and debt are studied assuming full employment and for unemployment. The conclusion summarizes the findings and compares the results of the different models. Finally, policy implications are given showing how governments should deal with high public debt to GDP ratios.
Managing The Sovereign Bank Nexus
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Author : Mr.Giovanni Dell'Ariccia
language : en
Publisher: International Monetary Fund
Release Date : 2018-09-07
Managing The Sovereign Bank Nexus written by Mr.Giovanni Dell'Ariccia and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-09-07 with Business & Economics categories.
This paper reviews empirical and theoretical work on the links between banks and their governments (the bank-sovereign nexus). How significant is this nexus? What do we know about it? To what extent is it a source of concern? What is the role of policy intervention? The paper concludes with a review of recent policy proposals.
Is There A Debt Threshold Effect On Output Growth
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Author : Mr.Alexander Chudik
language : en
Publisher: International Monetary Fund
Release Date : 2015-09-08
Is There A Debt Threshold Effect On Output Growth written by Mr.Alexander Chudik and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-09-08 with Business & Economics categories.
This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness. Our contribution is both theoretical and empirical. On the theoretical side, we develop tests for threshold effects in the context of dynamic heterogeneous panel data models with cross-sectionally dependent errors and illustrate, by means of Monte Carlo experiments, that they perform well in small samples. On the empirical side, using data on a sample of 40 countries (grouped into advanced and developing) over the 1965- 2010 period, we find no evidence for a universally applicable threshold effect in the relationship between public debt and economic growth, once we account for the impact of global factors and their spillover effects. Regardless of the threshold, however, we find significant negative long-run effects of public debt build-up on output growth. Provided that public debt is on a downward trajectory, a country with a high level of debt can grow just as fast as its peers in the long run.
Introducing A New Broad Based Index Of Financial Development
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Author : Katsiaryna Svirydzenka
language : en
Publisher: International Monetary Fund
Release Date : 2016-01-12
Introducing A New Broad Based Index Of Financial Development written by Katsiaryna Svirydzenka and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-01-12 with Business & Economics categories.
There is a vast body of literature estimating the impact of financial development on economic growth, inequality, and economic stability. A typical empirical study approximates financial development with either one of two measures of financial depth – the ratio of private credit to GDP or stock market capitalization to GDP. However, these indicators do not take into account the complex multidimensional nature of financial development. The contribution of this paper is to create nine indices that summarize how developed financial institutions and financial markets are in terms of their depth, access, and efficiency. These indices are then aggregated into an overall index of financial development. With the coverage of 183 countries on annual frequency between 1980 and 2013, the database should offer a useful analytical tool for researchers and policy makers.
Global Debt Database Methodology And Sources
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Author : Samba Mbaye
language : en
Publisher: International Monetary Fund
Release Date : 2018-05-14
Global Debt Database Methodology And Sources written by Samba Mbaye and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-05-14 with Business & Economics categories.
This paper describes the compilation of the Global Debt Database (GDD), a cutting-edge dataset covering private and public debt for virtually the entire world (190 countries) dating back to the 1950s. The GDD is the result of a multiyear investigative process that started with the October 2016 Fiscal Monitor, which pioneered the expansion of private debt series to a global sample. It differs from existing datasets in three major ways. First, it takes a fundamentally new approach to compiling historical data. Where most debt datasets either provide long series with a narrow and changing definition of debt or comprehensive debt concepts over a short period, the GDD adopts a multidimensional approach by offering multiple debt series with different coverages, thus ensuring consistency across time. Second, it more than doubles the cross-sectional dimension of existing private debt datasets. Finally, the integrity of the data has been checked through bilateral consultations with officials and IMF country desks of all countries in the sample, setting a higher data quality standard.