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The Impact Of Public Debt On Economic Growth


  • Maria Letitia Andronic (Brătulescu)

    (Transilvania University of Braşov Faculty of Economic Sciences and Business Administration)


The general upward trend of public debt at global level is perceived to have a significant economic impact. This paper analyses the degree in which the public debt evolution in the European Union countries over the last two decades influences economic growth. The average results show moderate to low levels of correlation degrees. The modest impact between the two measures might be the consequence of the budgetary policies implemented in the EU with respect to the limits imposed to the public amounts borrowed especially in times of crises. The increased discipline in the use of public loans led to a more rigorous spending and to a more accurate analysis of the real needs bringing forward public investments. Nevertheless, the correlation in the countries with high public debts, as in the case of Greece, is more obvious, leading to the conclusion that economic recessions are also consequences of higher indebtedness levels.

Suggested Citation

  • Maria Letitia Andronic (Brătulescu), 2019. "The Impact Of Public Debt On Economic Growth," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 2(47), pages 13-24, December.
  • Handle: RePEc:aio:aucsse:v:2:y:2019:i:47:p:13-24

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    More about this item


    public debt; economic growth; correlation analysis; financial crisis; budget deficit;

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy


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