Article

The dynamic relationship between global debt and output

Authors:
Yun Jung Kim
Yun Jung Kim
Yun Jung Kim
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Jing Zhang at Federal Reserve Bank of Chicago
Jing Zhang
Caroline Beetz Fenske
Caroline Beetz Fenske
Caroline Beetz Fenske
  • This person is not on ResearchGate, or hasn't claimed this research yet.
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... A strong expansion of the debt can be associated with a significant economic contraction that can last for years. 2 Whatever the economic situation (expansion or recession), we have noted that for some European OECD countries, the pace of growth is not the same as for others due to their high indebtedness ratios and lack of energy resources, 3 where the pace of GDP growth is affected by energy supply for some countries or by their debt policies for others. Given the financial and economic downturn, the group of European OECD members, especially the ones with weak economies-the so-called GIIPS countries (Greece, Ireland, Italy, Portugal, and Spain)-represent a valuable case for testing the dynamics and relationships of persistently high levels of public deficits and external imbalances. ...
ENERGY SUPPLY, PUBLIC DEBT, AND ECONOMIC GROWTH: CAUSALITY ANALYSIS FOR A PANEL OF OECD EUROPEAN COUNTRIES
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... The balance sheet effect, resulting from exchange rate depreciation combined with high foreign debt, has a negative effect on investments and economic growth. This result confirms Ottonello and Perez (2019) findings that prolonged expansion gradually dissipates the original sin and Kim et al. (2021) result that the debt shock adversely affects future economic output. The coverage ratio (the ratio of exports to imports) has negative long-run association with the external debt level. ...
The surge in Tunisia foreign debt: causes and possible ways out
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  • Feb 2023
Over the last decade (2010–2020), Tunisia foreign debt has experienced a phenomenal jump. It has increased at a faster pace than domestic debt. It has doubled without any significant positive effect on investments or economic growth. This study aims to identify the major causes of this abnormal increase in Tunisia foreign debt. Since the model variables are not all stationary at level, the paper applies the autoregressive distributed lag technique to quantitative quarterly economic data covering the 2009–2020 period. Findings show that the economic growth, the exchange rate, the current deficit, the coverage ratio, and the lagged foreign debt itself are the major causes leading to the phenomenal increase of Tunisia foreign debt. Based on these findings, the paper suggests boosting foreign currency-generating activities, containing current public expenditures, stabilizing the exchange rate, and making structural economic adjustments as possible escape roots.
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Emerging market business cycles: The cycle is the trend
  • Feb 2007
  • J POLIT ECON
  • 69-102
  • Mark Aguiar
  • Gita Gopinath
Mark Aguiar and Gita Gopinath, 2007, "Emerging market business cycles: The cycle is the trend," Journal of Political Economy, Vol. 115, No. 1, February, pp. 69-102. Crossref, https://doi.org/10.1086/511283
The source of the GDP (output) data is the World Bank's World Development Indicators database; debt statistics are from 1) the International Monetary Fund's Global Debt Database and Historical Public Debt Database, and 2) the database
  • Jan 1970
  • J INT ECON
  • 223-250
The authors' large panel data set comprises 21 developed and 51 developing countries. The source of the GDP (output) data is the World Bank's World Development Indicators database; debt statistics are from 1) the International Monetary Fund's Global Debt Database and Historical Public Debt Database, and 2) the database published in Philip R. Lane and Gian Maria Milesi-Ferretti, 2007, "The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970-2004," Journal of International Economics, Vol. 73, No. 2, November, pp. 223-250. Crossref, https://doi.org/10.1016/j.jinteco.2007.02.003
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