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Examination of Indicators Determining the Rate of Government Debt – Comparative Analysis of the V4 and GIPS Countries Using One-step Dynamic Panel Regression

Author

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  • Sávai, Marianna
  • Kiss, Gábor Dávid

Abstract

As a consequence of the crisis of 2008, public debts started to grow throughout the world, causing further economic problems for countries. Several EU Member States have been forced to use the assistance of the troika to alleviate their financing difficulties. The purpose of this paper is to examine the factors influencing public debt. We compared the factors affecting the public debt of GIPS countries, supplemented with data series of the Visegrád Group and Cyprus, using the one-step dynamic panel model. The correlations previously uncovered in literature could be identified in both panels. Deficit, inflation and the deterioration of the current account balance lead to the increase, whereas the growth of the real interest rate and GDP and the improvement of employment lead to the decrease of public debt. Real effective exchange rate, however, proved insignificant in both panels.

Suggested Citation

  • Sávai, Marianna & Kiss, Gábor Dávid, 2017. "Examination of Indicators Determining the Rate of Government Debt – Comparative Analysis of the V4 and GIPS Countries Using One-step Dynamic Panel Regression," Public Finance Quarterly, Corvinus University of Budapest, vol. 62(4), pages 444-461.
    • Handle: RePEc:pfq:journl:v:62:y:2017:i:4:p:444-461
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    File URL: https://unipub.lib.uni-corvinus.hu/8755/
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "From Financial Crash to Debt Crisis," American Economic Review, American Economic Association, vol. 101(5), pages 1676-1706, August.
    2. Barcza, György, 2015. "The Changing Role of Public Debt in Economics and the Basic Principles of Hungarian Debt Management," Public Finance Quarterly, Corvinus University of Budapest, vol. 60(4), pages 433-446.
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    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
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    Keywords

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    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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