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Exploring The Effect Of Trade Balance And Industrial Productions On National Debt


  • Panagiotis KOTSIOS


The goal of the current research is to examine structural determinants of national debt levels. Mainstream economic theory holds government revenues and expenditures as the major causes of budget deficits and the accumulation of national debt. This paper adopts a somehow different approach, considering industrial production and trade balance as major causes of a country’s debt. In order to test the validity of this hypothesis, it examines the relationship between national debt, government revenues and expenditures, industrial production and trade balance in an econometric model. The data used come from Eurostat and they concern 26 European economies.

Suggested Citation

  • Panagiotis KOTSIOS, 2012. "Exploring The Effect Of Trade Balance And Industrial Productions On National Debt," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 7(1(19)/ Sp), pages 64-72.
  • Handle: RePEc:ush:jaessh:v:7:y:2012:i:1(18)_spring2012:p:64

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    References listed on IDEAS

    1. Jerome Creel & Francesco Saraceno, 2009. "Wealth effects and public debt in an endogenous growth model," Documents de Travail de l'OFCE 2009-35, Observatoire Francais des Conjonctures Economiques (OFCE).
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    More about this item


    national debt; trade balance; industrial production; panel data analysis;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt


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