New Evidence from Government Debt and Economic Growth in Core and Periphery European Union Countries: Asymmetric Panel Causality

İbrahim Özmen ()
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İbrahim Özmen: Department of Public Finance, Aksehir Faculty of Economics and Administrative Sciences, Selcuk University, Aksehir, 42550, Konya, Turkey.

Journal for Economic Forecasting, 2022, issue 3, 167-187

Abstract: This paper aims to investigate the asymmetric panel causality between general government debt and economic growth for European Union core and periphery countries using annual data from 1980 to 2018. The results show that there is evidence for different combinations of the asymmetric causality relationship between variables. Also, while the inner core panel group and individual results are partially inconsistent, the results regarding the periphery constitute integrity. On one hand core results may indicate the presence of different and powerful factors that lead to positive and negative effects. On the other hand, the general government debt increased in the periphery refers to positive causal effects on economic growth. Besides, while general government debt and economic growth variables indicate cross-sectional dependency, the variables are homogeneous for both panels.

Keywords: public debt; growth; fiscal policy; asymmetric panel causality (search for similar items in EconPapers)
JEL-codes: C40 E62 H63 O40 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2022:i:3:p:167-187

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