Monetary Economics Seminar of Kobe University (Jointly supported by RIEB Seminar)
|2017年4月22日（土）午後3時00分から (Saturday, April 22, 2017, 3:00pm-)|
Meeting Room at RIEB (Annex, 2nd Floor)
The seminar is primarily for the workshop members. But non-members are also welcome to attend.
Copies of the paper will be available at the Office of Promoting Research Collaboration.
There will be a reception held after the seminar. If you would like to attend this seminar, please email us at Office of Promoting Research Collaboration your name, affiliation, email address and whether you will attend the reception or not, by a week before the workshop. Details will be notified later.
|小川 一夫 氏 (Kazuo OGAWA)|
|関西外国語大学外国語学部（College of Foreign Studies, Kansai Gaidai University）|
|Public Debt, Economic Growth and the Real Interest Rate: A Panel VAR Approach to EU and OECD Countries|
|The need for fiscal austerity is mostly motivated by the fear that a too high public debt to GDP ratio will crowd out private expenditures and so hurt economic growth. We investigate the causal relationship between the public debt ratio and economic growth for 31 EU and OECD countries. A number of empirical studies have tackled the causality problem, but many only include public debt and GDP and very few make the transmission mechanism of crowding out via the real interest rate explicit in their analysis. We estimate a panel VAR model that incorporates the long-term real interest rate on government bonds as a vehicle to transmit shocks in both the public debt ratio and in economic growth. We find no causal link from the public debt ratio to economic growth, irrespective of the levels of public debt. Rather, we find a causal relation from the GDP growth to the public debt ratio. In high-debt countries, the direct negative impact of economic growth on public debt to GDP ratio is enhanced by a rise in the long-term real interest rate, which in turn decreases interest-sensitive demand and leads to a further increase in the public debt to GDP ratio.|