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Is More Government Debt Conducive to Economic Growth in New Zealand?

Yıl 2020, Cilt: 5 Sayı: 2, 20 - 24, 27.12.2020

Öz

Applying an extended production function and using a sample of annual data over the period of 1985-2019, this paper finds that the government debt ratio and the growth rate of real gross domestic product in New Zealand exhibit an inverted U-shape relationship and that the threshold or turning point of the debt ratio in New Zealand is estimated to be 40.94%. It suggests that a rising debt ratio would raise the growth rate of real gross domestic product as long as the debt ratio is no greater than 40.94% and that a higher debt ratio would reduce the growth rate of real gross domestic product if the debt ratio is greater than 40.94%. In addition, a higher growth rate of employment or investment/GDP ratio raises the growth rate of real gross domestic product. Therefore, the 90% debt threshold proposed by Reinhart-Rogoff is not applicable to New Zealand.

Destekleyen Kurum

None

Proje Numarası

None

Kaynakça

  • Bentour, E. M. (2018). On the public debt and growth threshold: one size does not necessarily fit all. Cahier de recherche du Creg.
  • Chirwa, T. G. (2017). Public debt and economic growth nexus in the Euro area: A dynamic panel ARDL approach. Working paper.
  • de Rugy, V., & Salmon, J. (2020). Debt and growth: A decade of studies. Working paper.
  • Égert, B. (2015a). The 90% public debt threshold: the rise and fall of a stylized fact. Applied Economics, 47(34-35), 3756-3770.
  • Égert, B. (2015b). Public debt, economic growth and nonlinear effects: Myth or reality?. Journal of Macroeconomics, 43, 226-238.
  • Goel, R. K., Payne, J. E., & Ram, R. (2008). R&D expenditures and US economic growth: A disaggregated approach. Journal of Policy Modeling, 30(2), 237-250.
  • Grennes, T. J., Fan, Q., & Caner, M. (2019). New evidence on debt as an obstacle for US economic growth. Mercatus Research Paper.
  • Herndon, T., Ash, M., & Pollin, R. (2014). Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff. Cambridge Journal of Economics, 38(2), 257-279.
  • Intartaglia, M., Antoniades, A., & Bhattacharyya, S. (2018). Unbundled debt and economic growth in developed and developing economies: An empirical analysis. The World Economy, 41(12), 3345-3358.
  • Kourtellos, A., Stengos, T., & Tan, C. M. (2013). The effect of public debt on growth in multiple regimes. Journal of Macroeconomics, 38, 35-43.
  • Liu, Z., & Lyu, J. (2020). Public debt and economic growth: threshold effect and its influence factors. Applied Economics Letters, 1-5.
  • Minea, A., & Parent, A. (2012). Is high public debt always harmful to economic growth? Reinhart and Rogoff and some complex nonlinearities.
  • Ram, R. (1986). Government size and economic growth: A new framework and some evidence from cross-section and time-series data. The American Economic Review, 76(1), 191-203.
  • Ram, R. (1989). Government size and economic growth: A new framework and some evidence from cross-section and time-series data: Reply. The American Economic Review, 79(1), 281-284.
  • Reinhart, C. M. and K. S. Rogoff (2010a). Growth in a time of debt. American Economic Review, 100(2), 573-78.
  • Reinhart, C. M., & Rogoff, K. S. (2010b). Debt and growth revisited. Working paper.
  • Reinhart, C. M., Reinhart, V. R., & Rogoff, K. S. (2012). Public debt overhangs: advanced-economy episodes since 1800. Journal of Economic Perspectives, 26(3), 69-86.
  • Schclarek, A. (2005). Debt and economic growth in developing and industrial countries. Department of Economics.
  • Shahor, T. (2018). The impact of public debt on economic growth in the Israeli economy. Israel Affairs, 24(2), 254-264.
  • Swamy, V. (2020). Debt and growth: Decomposing the cause and effect relationship. International Journal of Finance & Economics, 25(2), 141-156.
  • Tran, T. P. (2020). The impact of external and domestic public debt on economic growth in ASEAN: A Panel-data Analysis of Per Capita Income Growth for Different Groups of Countries. エコノミア, 70(1), 43-48.
  • Wibowo, M. G. (2017). Public debt and economic growth in the South East Asian Countries. Signifikan: Jurnal Ilmu Ekonomi, 6(1), 177-188.
  • Woo, J., & Kumar, M. S. (2015). Public debt and growth. Economica, 82(328), 705-739.

Yeni Zelanda'da Daha Fazla Kamu Borcu Ekonomik Büyümeyi Destekler mi?

Yıl 2020, Cilt: 5 Sayı: 2, 20 - 24, 27.12.2020

Öz

Bu çalışma, 1985-2019 dönemi için yıllık veriler ile genişletilmiş bir üretim fonksiyonu tahmin ederek Yeni Zelanda'da kamu borç oranının ve reel gayri safi yurtiçi hasıla büyüme oranının ters U şeklinde bir ilişkiye sahip olduğunu ve Yeni Zelanda'daki borç oranının eşik değerinin veya dönüm noktasının %40.94 olduğunu ortaya koymaktadır. Borç oranı %40.94’ü aşmadığı sürece borç oranının artışının, reel gayri safi yurtiçi hasıla büyüme oranını artıracağını ve borç oranının %40.94'ü aştığı durumda daha yüksek borç oranının reel gayri safi yurtiçi hasıla büyüme oranını azaltacağı gösterilmiştir. Buna ek olarak, daha yüksek bir istihdam büyüme oranı veya yatırım/GSYİH oranı, reel gayri safi yurtiçi hasıla büyüme oranını artırmaktadır. Bu nedenle, Reinhart-Rogoff tarafından önerilen %90 borç eşiği Yeni Zelanda için geçerli değildir.

Proje Numarası

None

Kaynakça

  • Bentour, E. M. (2018). On the public debt and growth threshold: one size does not necessarily fit all. Cahier de recherche du Creg.
  • Chirwa, T. G. (2017). Public debt and economic growth nexus in the Euro area: A dynamic panel ARDL approach. Working paper.
  • de Rugy, V., & Salmon, J. (2020). Debt and growth: A decade of studies. Working paper.
  • Égert, B. (2015a). The 90% public debt threshold: the rise and fall of a stylized fact. Applied Economics, 47(34-35), 3756-3770.
  • Égert, B. (2015b). Public debt, economic growth and nonlinear effects: Myth or reality?. Journal of Macroeconomics, 43, 226-238.
  • Goel, R. K., Payne, J. E., & Ram, R. (2008). R&D expenditures and US economic growth: A disaggregated approach. Journal of Policy Modeling, 30(2), 237-250.
  • Grennes, T. J., Fan, Q., & Caner, M. (2019). New evidence on debt as an obstacle for US economic growth. Mercatus Research Paper.
  • Herndon, T., Ash, M., & Pollin, R. (2014). Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff. Cambridge Journal of Economics, 38(2), 257-279.
  • Intartaglia, M., Antoniades, A., & Bhattacharyya, S. (2018). Unbundled debt and economic growth in developed and developing economies: An empirical analysis. The World Economy, 41(12), 3345-3358.
  • Kourtellos, A., Stengos, T., & Tan, C. M. (2013). The effect of public debt on growth in multiple regimes. Journal of Macroeconomics, 38, 35-43.
  • Liu, Z., & Lyu, J. (2020). Public debt and economic growth: threshold effect and its influence factors. Applied Economics Letters, 1-5.
  • Minea, A., & Parent, A. (2012). Is high public debt always harmful to economic growth? Reinhart and Rogoff and some complex nonlinearities.
  • Ram, R. (1986). Government size and economic growth: A new framework and some evidence from cross-section and time-series data. The American Economic Review, 76(1), 191-203.
  • Ram, R. (1989). Government size and economic growth: A new framework and some evidence from cross-section and time-series data: Reply. The American Economic Review, 79(1), 281-284.
  • Reinhart, C. M. and K. S. Rogoff (2010a). Growth in a time of debt. American Economic Review, 100(2), 573-78.
  • Reinhart, C. M., & Rogoff, K. S. (2010b). Debt and growth revisited. Working paper.
  • Reinhart, C. M., Reinhart, V. R., & Rogoff, K. S. (2012). Public debt overhangs: advanced-economy episodes since 1800. Journal of Economic Perspectives, 26(3), 69-86.
  • Schclarek, A. (2005). Debt and economic growth in developing and industrial countries. Department of Economics.
  • Shahor, T. (2018). The impact of public debt on economic growth in the Israeli economy. Israel Affairs, 24(2), 254-264.
  • Swamy, V. (2020). Debt and growth: Decomposing the cause and effect relationship. International Journal of Finance & Economics, 25(2), 141-156.
  • Tran, T. P. (2020). The impact of external and domestic public debt on economic growth in ASEAN: A Panel-data Analysis of Per Capita Income Growth for Different Groups of Countries. エコノミア, 70(1), 43-48.
  • Wibowo, M. G. (2017). Public debt and economic growth in the South East Asian Countries. Signifikan: Jurnal Ilmu Ekonomi, 6(1), 177-188.
  • Woo, J., & Kumar, M. S. (2015). Public debt and growth. Economica, 82(328), 705-739.
Toplam 23 adet kaynakça vardır.

Ayrıntılar

Birincil Dil İngilizce
Konular Ekonomi
Bölüm Araştırma Makalesi
Yazarlar

Yu Hsing 0000-0003-1537-0293

Proje Numarası None
Yayımlanma Tarihi 27 Aralık 2020
Yayımlandığı Sayı Yıl 2020 Cilt: 5 Sayı: 2

Kaynak Göster

APA Hsing, Y. (2020). Is More Government Debt Conducive to Economic Growth in New Zealand?. JOEEP: Journal of Emerging Economies and Policy, 5(2), 20-24.

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