Modeling Current Account Balance and General Government Net Lending and Borrowing and GDP Growth for Developed Countries

Md Fourkan
Additional contact information
Md Fourkan: Department of Marketing and Entrepreneurship, Kent State University, 800 E. Summit St. Kent, OH 44242, USA.

Post-Print from HAL

Abstract: In this study we endeavored to model Gross Domestic Product (GDP) growth rate as a function of general government net lending and borrowing, current account balance, inflation rate, and unemployment rate for four developed countries in the world -United Kingdom, United States, Canada, and France. We have controlled the purchasing power parity GDP in international dollar in our model specification. Our attention in this paper is to show the causal effect of general government net lending and borrowing and current account balance on GDP growth rate for the four countries for a 40-year period, 1980-2020. In this panel data analysis, we find that general government net lending and borrowing is having a positive effect when government lends more to the other sector of the economy and nonresidents and borrow less from the same. We also find that the current account balance has a nonsignificant negative effect on GDP growth rate in fixed effect model. Although, this effect sign and magnitude is almost identical to fixed effect model, however, it is significant in the random effect model.

Date: 2021-03-02
References: Add references at CitEc
Citations:

Published in Asian Journal of Economics, Finance and Management , 2021, 3 (1), pp.105-113

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05188082

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().