THE EFFECT OF PUBLIC DEBT AND OTHER DETERMINANTS ON THE ECONOMIC GROWTH OF SELECTED EUROPEAN COUNTRIES

Authors

  • Humberto Nuno Rito Ribeiro Polytechnic Institute of Bragança
  • Tadas Vaicekauskas Kaunas University of Technology
  • Aušrinė Lakštutienė Kaunas University of Technology

DOI:

https://doi.org/10.5755/j01.em.17.3.2108

Keywords:

Public debt, government borrowing, debt crisis, economic growth, economic recession

Abstract

Public debt has diverse effects on GDP varying from country to country and resulting from a number of different factors. This project is dedicated to research the effects of various macroeconomic indicators on GDP, with an emphasis on debt related predictors, using a multiple linear regression model. Findings of this research confirm the hypothesis that country determinants influence the efficiency of public borrowing and its effect on GDP. Surprisingly, no relation between debt crisis, level of government debt and its effect on GDP could be found. On the contrary, private borrowing showed a positive effect on the economy in every country where it resulted statistically significant. Interesting results were achieved concerning the openness of the economy and foreign direct investment. They were unequal, whereas initially supposed to be mostly positive.

DOI: http://dx.doi.org/10.5755/j01.em.17.3.2108

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Published

2012-04-24

Issue

Section

Financial Economics