Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149248
Authors: 
Bökemeier, Bettina
Clemens, Christiane
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 6161
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper empirically studies whether it pays off (in terms of economic growth) to fulfill the convergence criteria on the public budget and participation in the Euro-zone. The analysis is based on data of European economies with a special focus on twelve Euro–zone members and a control group of six non–Euro countries for the years from 1970 to 2014. The results show that growth is higher if the debt to GDP ratio is below 60 % compared to values above it. Moreover, a comparison with European economies outside the Euro–zone shows higher growth values for Euro–members than for the control group. Regression estimations reveal a negative relationship between the two variables for the Euro–group. For the control group the relationship is not statistically significant.
Subjects: 
economic growth
fiscal policy
debt
European Union
JEL: 
O40
H63
E62
Document Type: 
Working Paper

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