Can re-regulation of the financial sector strike back public debt?
Luca Agnello () and
Ricardo Sousa ()
Economic Modelling, 2015, vol. 51, issue C, 159-171
This paper analyses the impact of financial sector policy changes on the dynamics of public debt. Using a panel of 89 countries from 1973 to 2005, we find that, overall, while the implementation of financial liberalisation policies significantly raises the public debt growth rate, the adoption of financial re-regulation measures does not reduce it in a significant manner. Looking at the different typologies of financial sector policy changes, we show that restrictions to international capital flows contribute to a decline in the growth rate of public debt. In contrast, the removal of entry barriers boosts public debt growth. Finally, our results suggest that financial reversals may help to reduce the growth rate of public debt only when the public debt-to-GDP ratio or the inflation rate is high.
Keywords: Public debt; Financial re-regulation; Financial liberalisation; Reforms; Reversals (search for similar items in EconPapers)
JEL-codes: H63 G01 G15 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:51:y:2015:i:c:p:159-171
Access Statistics for this article
Economic Modelling is currently edited by S. Hall and P. Pauly
More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().