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Public Debt, Economic Openness, And Sustainable Economic Growth in Europe: A Dynamic Panel Causal Analysis

Author

Listed:
  • Rudra P. Pradhan

    (Indian Institute of Technology, India)

  • Mak B. Arvin

    (Trent University, Canada)

  • Mahendhiran Nair

    (Sunway University Malaysia)

  • John H. Hall

    (University of Pretoria, South Africa)

Abstract

This paper examines the short-term and long-term dynamics between public sector debt, economic openness, and economic growth in European countries between 1990 and 2018. Using the panel vector error correction model, we find that both public debt and economic openness contribute to long-term economic growth in European countries. The empirical analysis also shows that there are strong endogenous links between public debt, economic openness and economic growth in Europe in the short run. These relationships suggest that governments in Europe should give careful attention to the co-curation of macroeconomic policies pertaining to public sector spending/taxation, economic openness, and economic growth.

Suggested Citation

  • Rudra P. Pradhan & Mak B. Arvin & Mahendhiran Nair & John H. Hall, 2022. "Public Debt, Economic Openness, And Sustainable Economic Growth in Europe: A Dynamic Panel Causal Analysis," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(1), pages 167-183.
    • Handle: RePEc:ris:jecdev:0026
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    References listed on IDEAS

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    Cited by:

    1. Rudra P. Pradhan & Mahendhiran S. Nair & Mak B. Arvin & John H. Hall, 2023. "Institutional quality, financial development and sustainable economic growth among lower income countries," Natural Resources Forum, Blackwell Publishing, vol. 47(3), pages 435-483, August.

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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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