Did the Euro Change the Effect of Fundamentals on Growth and Uncertainty?

Jaime Luque
Authors registered in the RePEc Author Service: Abderrahim Taamouti

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: We present empirical evidence on whether the introduction of the euro has changed the effect of economic fundamentals on the growth rates of euro countries’ GDPpc and GDPpc volatility. We find that the effect of increments in debt on economic growth exhibits a structural break in 1999. A robustness check attributes this break to the financial crisis, however. There is also a statistically significant structural break in the impact of increments in government debt on economic uncertainty. This result is robust to a battery of robustness checks, including exclusion of the recent financial crisis period and comparison with non-euro European countries.

Keywords: GDPpc; growth; rate; GDPpc; growth; rate; volatility; Fundamentals; Government; debt; Currency; union; Euro; zone (search for similar items in EconPapers)
JEL-codes: E02 E52 F00 F02 F15 F33 F34 F36 F42 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-eec, nep-fdg and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Did the euro change the effect of fundamentals on growth and uncertainty? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we1221

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