Template-type: ReDIF-Paper 1.0  
Author-Name: Marta Gómez-Puig
Author-Email: marta.gomezpuig@ub.edu
Author-Workplace-Name: Universitat de Barcelona, Department of Economics and Riskcenter. 08034 Barcelona, Spain.
Author-Name: Simón Sosvilla-Rivero
Author-Email: sosvilla@ccee.ucm.es
Author-Workplace-Name: Instituto Complutense de Estudios Internacionales (ICEI). Universidad Complutense de Madrid.
Title: Nonfinancial debt and economic growth in euro-area countries
Abstract: In this paper we analyse the effects of all sources of the accumulation of nonfinancial debt (household, corporate as well as 
	government) on economic growth in ten euro-area countries during the 1980-2015 period. To this end, we make use of three models (a 
	baseline, an asymmetric and a threshold model) based on the empirical growth literature augmented by debt to assess whether a debt change 
	has an impact on growth over and above other determinants, treating the different types of borrowers separately. By exploring the time 
	series dimension in order to properly account for the historical experience of each country in the sample, we aim to detect potential 
	heterogeneities in the relationship across euro area countries. Our results with both the baseline and the asymmetric models suggest that 
	although the effects on nonfinancial debt accumulation clearly differ across countries, on average, the highest marginal impact of a rise 
	in debt corresponds to the household and public sector, with an increase in private debt being more harmful in peripheral than in central 
	countries; in contrast, the average effect of a rise in public debt does not differ between these two groups of countries. As for the 
	effects of a debt increase beyond the turning point estimated in the threshold model, our findings indicate that the highest marginal 
	impact corresponds to the household sector.
Classification-JEL: C22, D12, F33, H63, O16, O40, O52.
Keywords:
 Public debt; Household debt; Nonfinancial corporate debt; Economic growth; Heterogeneity; Euro area; Peripheral EMU countries; Central 
	EMU countries.
Creation-Date: 2017
Length: 44 pages
Number: 1708
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/wpaper17-08.txt
File-URL: https://eprints.ucm.es/id/eprint/44950/1/WP08-17.pdf
File-Format: Application/pdf
File-Function: Full text
Handle: RePEc:ucm:wpaper:1708