Search results for: Eurozone
Vighneswara Swamy, World Economics, June 2018
The effects of government debt on economic growth has become of immense importance in the backdrop of the Eurozone sovereign debt crisis and Reinhart & Rogoff’s related research. This study is based on a sizeable dataset which extends the horizon of analysis to country groupings and makes it inclusive of economic, political, and regional diversities. The study overcomes issues related to data adequacy, coverage of countries, heterogeneity, endogeneity, and non-linear relationships by conducting a battery of robustness tests. An increase in the debt-to-GDP ratio is found to be associated with a reduction in average growth, but the relationship is nonlinear.
Brian Sturgess, World Economics, June 2010
This paper looks at the recent problems in official Greek economic data on public finances, whose reliability has been impaired by inappropriate accounting methods, the application of poor statistical methods and deliberate misreporting. Data on deficits and debt have been misleading from before Greece’s eurozone entry, but despite a regular supply of public information about the problems, the rating agencies did not respond by downgrading Greek public debt until it was too late. These agencies reacted to, rather than leading, market tends that were already under way. The issue casts doubt on the fitness for purpose of the European Statistical System where the powers of Eurostat, the statistics arm of the European Commission have been inadequate to effectively monitor the fiscal status of eurozone countries. These powers, at present limited by the principle of subsidiarity to administering a Code of Practice, must be strengthened closer to approximating a power of audit.
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