On the determinants of economic growth: Empirical evidence from the Eurozone countries. (June 2020)

• Record Type: Journal Article
• Authors: Pegkas, Panagiotis; Staikouras, Christos; Tsamadias, Constantinos
• Is Part Of: International area studies review. Volume 23:Number 2(2020)
• Page Start: 210
• Page End: 229
• Publication Date: 2020-06
• Subjects: Economic growth -- public debt -- investment -- human capital -- trade openness -- Eurozone; Area studies -- Periodicals; Area studies -- Korea (South) -- Periodicals; International economic relations -- Periodicals; Globalization -- Economic aspects -- Periodicals; Globalization -- Periodicals; World politics -- Periodicals; 337.05
• DOI: 10.1177/2233865920912588
• Languages: English
• ISSNs: 2233-8659

Abstract

This study empirically investigates the causal relationship between economic growth and several factors (investment, human capital, trade openness and public debt) in the Eurozone countries, where imbalances persist several years after the financial crisis. The results reveal a long-run relationship between variables and public debt, as investment, human capital and trade openness positively affect growth. On the other hand, there is a negative long-run effect of public debt on growth. Furthermore, the results indicate that there is long-run unidirectional causality running from investment, trade openness and human capital to growth and bidirectional causality between public debt and growth. The overall results reveal that Eurozone countries should base their growth strategies on fiscal consolidation, increasing exports, correcting the use of public investment and improving the quality of human capital, especially in higher education.