Econometric Analysis of the Influence of Economic Downturns on Public Debt in the European Union
DOI:
https://doi.org/10.15678/ZNUEK.2016.0949.0104Keywords:
public debt, economic crisis, European Union, econometric modelsAbstract
The paper examines long-term trends in public debt for countries of the European Union. Special attention is paid to the influence of economic crisis on public debt levels and budget deficits. The conclusions are based on time series models and causality models of GDP and budget deficit as well as on models which describe the long-term levels of relative public debt. The results show a lack of significant correlation between initial and final levels of public debt and the economic growth rate. However, they do show that nagative effects of economic crisis strongly influence the growth of long-term relative public debt levels of European countries.
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