Granger causality between public debt and economic growth: further evidence from panel data
Identifiers
Permanent link (URI): http://hdl.handle.net/10017/59859DOI: 10.1080/13504851.2023.2274300
ISSN: 1350-4851
Date
2023Affiliation
Universidad de Alcalá. Departamento de EconomíaFunders
Ministerio de Economía y Competitividad
Bibliographic citation
Applied Economics Letters, 2023
Keywords
Public debt
Economic growth
Granger-causality
Panel data
Project
info:eu-repo/grantAgreement/MICINN//grant PID2019-105986GB-C21
Document type
info:eu-repo/semantics/article
Version
info:eu-repo/semantics/publishedVersion
Rights
Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)
Access rights
info:eu-repo/semantics/openAccess
Abstract
This paper examines the causal relationships between public debt and economic growth. To that end, we employ the novel homogeneous approach to testing for Granger non-causality in a heterogeneous panel to a sample of 115 countries from 1995 to 2016. This methodology suits high persistence, moderate time dimension and heterogeneous nuisance parameters. Our results indicate that when examining the pairwise relationship, in most of cases, there is a unidirectional Granger-causality relationship running from debt to growth. Nevertheless, when controlling for the explanatory variables that have been consistently identified as drivers of growth in the literature, in all the cases, we find evidence of bidirectional Granger-causality between public debt and economic growth
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Granger_Ramos_AEL_2023.pdf | 871.2Kb |
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