Debt uncertainty and economic growth: evidence from five highly indebted Eurozone countries

ABSTRACT

The goal of this study is to examine the relationships between economic growth and debt uncertainty by applying the threshold generalized autoregressive conditional heteroscedasticity modelling methodology in five Eurozone countries spanning the period 2001–2013. The results document that during the European fiscal crisis period, debt uncertainty exerts a significant negative effect on economic growth across all five Eurozone countries that experienced the deterioration of their fiscal positions.

KEYWORDS:

• Economic growth
• public debt uncertainty
• Eurozone countries

JEL CLASSIFICATION:

• E62
• E23