Book | Chapter

211689

Debt, growth and inflation in large European economies

a vector auto-regression analysis

Majid Taghavi

pp. 165-179

Abstract

This paper attempts to empirically test the hypothesis that whether debt matters in the EU. This has been performed by examining the potential adverse effects of debt in large European economies on investment, inflation and growth. Using the hybrid cointegration and vector autoregressive models, the findings, based on the period 1970–97, suggest that debt causes significant adverse effects on investment, but its impact on growth is not clear-cut. Moreover, debt appears to be inflationary in most cases in the long run, though produces no clear short run pattern on inflation.

Publication details

Published in:

Mueller Dennis C., Cantner Uwe (2001) Capitalism and democracy in the 21st century: proceedings of the international Joseph A. Schumpeter society conference, Vienna 1998 "capitalism and socialism in the 21st century". Heidelberg, Physica.

Pages: 165-179

DOI: 10.1007/978-3-662-11287-8_9

Full citation:

Taghavi Majid (2001) „Debt, growth and inflation in large European economies: a vector auto-regression analysis“, In: D. C. Mueller & U. Cantner (eds.), Capitalism and democracy in the 21st century, Heidelberg, Physica, 165–179.