NONLINEAR ANALYSIS OF ECONOMIC GROWTH, PUBLIC DEBT AND POLICY TOOLS
Journal Title: Asian Economic and Financial Review - Year 2017, Vol 7, Issue 1
Abstract
This paper empirically analyzes the nonlinear relation between real GDP growth per capital and public debt by employing ADL test for threshold cointegration method. Empirical results show that there exists a threshold cointegration relationship between public debt and real GDP growth per capital. In case of the empirical results, cutting public debt could boost economic growth in the long-term. However, the short term variation of public debt makes little impact on real output per capital. Comparatively speaking, human capital and investment rate and trade openness make larger influence on real GDP growth per capital. From the perspective of economic policy, the government should take full advantage of the fiscal policy to cut public debt with the operation space of monetary policy being compressed.
Authors and Affiliations
Yifei Cai| Northeast Normal University (Changchun, China)
Keywords
Related Articles
- EP ID EP2327
- DOI -
- Views 452
- Downloads 39
CAPITAL STRUCTURE DECISIONS AND FIRM PERFORMANCE OF VIETNAMESE SOES
This paper examines relationships between capital structure decisions, firm performance, and Vietnamese state-owned enterprises (SOEs). Capital structure decisions are considered by short- and long-term debts respectivel...
INFLATION THRESHOLDS AND ECONOMIC GROWTH: EVIDENCE FROM NIGERIA
Inflation is one of the most challenging macroeconomic objectives capable of frustrating every pragmatic effort at achieving other macroeconomics goals if not curtailed. To this end, the paper empirically examines the th...
ECONOMIC DEVELOPMENT, WOMEN EMPOWERMENT AND U SHAPED LABOUR FORCE FUNCTION : TIME SERIES EVIDENCE FOR BANGLADESH
This paper supports the validity of nonlinear quadratic U shaped function between female labor force participation rate and Economic Growth for Bangladesh over the period 1991 -2012. The result is robust when growth of p...
An ARDL Analysis Of The Exchange Rates Principal Determinants: ASEAN-5 Aligned with The Yen
This study examines an empirical analysis of long-run and short-run forcing variables of purchasing power parity (PPP) for ASEAN-5 currencies: Malaysian Ringgit, Indonesian Rupiah, the Philippines Peso, Thailand Bath, an...
EMPIRICAL TESTING OF EXCHANGE RATE AND INTEREST RATE TRANSMISSION CHANNELS IN CHINA
This paper examines the exchange rate and interest rate volatility transmission channels in China by applying Granger causality, Johansen cointegration, and the VAR model. Empirical results taken from the exchange rate c...