ISSN:
1432-1386
Keywords:
Key words: Cointegration – Convergence – Debt ratio – Deficit ratio – Vector autoregression
;
JEL-classification: H6, C3
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract. This paper attempts to empirically test the hypothesis that whether debt matters in the EU. This has been performed by examining the potential adverse effects of debt in large European economies on investment, inflation and growth. Using the hybrid cointegration and vector autoregressive models, the findings, based on the period 1970–97, suggest that debt causes significant adverse effects on investment, but its impact on growth is not clear-cut. Moreover, debt appears to be inflationary in most cases in the long run, though produces no clear short run pattern on inflation.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/s001910050010
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