Does sovereign debt weaken economic growth? A Panel VAR analysis.

We estimate a panel vector autoregressive model to analyze the highly disputed relationship between debt and growth. Using data on 20 developed countries, we find no evidence for a robust effect on debt to growth, even for higher levels of sovereign debt. We do find a significant negative reverse effect of growth to debt, which explains the negative correlation.

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Year of publication:	2013-10
Authors:	Lof, Matthijs ; Malinen, Tuomas
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Public debt \| debt share \| GDP growth

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	C33 - Models with Panel Data ; H63 - Debt; Debt Management ; O43 - Institutions and Growth
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011110021