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2015 | 63 | 9 | 944 – 958
Article title

ASYMMETRIC IMPACT OF PUBLIC DEBT ON ECONOMIC GROWTH IN SELECTED EU COUNTRIES

Content
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Languages of publication
EN
Abstracts
EN
The paper explores the asymmetric relation between public debt and economic growth in 13 EU countries in the period 1993 – 2013. A panel data model uncovers a linear relation between debt-to-GDP decrease and GDP growth, while the relation between the debt-to-GDP increase and GDP growth is defined by an inverted U-shaped curve (parabola) with the peak at a 64% debt-to-GDP ratio. We identified two main patterns in relations between debt-to-GDP and GDP growth: (i) hysteresis loop – country data trace the closed circle defined within the debt interval [53%, 113%] (Austria, Finland, Denmark) and (ii) debt trap – country debt-to-GDP ratio breaks the 113% level and indebtedness increase followed by the GDP fall is tracing the diverging tail of parabola (debt trap in Greece, Italy, Portugal).
Contributors
  • Technical University of Košice, Faculty of Economics, Department of Finance, Němcovej 32, 040 01 Košice, Slovak Republic, veronika.sulikova@tuke.sk
References
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Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.cejsh-3622ac8f-8a17-4ee4-a685-cc5184266096
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